ECB survey shows banks continue to rein in lending

08/11/2008 | Wall Street Journal, The

A survey from the European Central Bank found that banks in the euro zone tightened lending standards for the fourth straight quarter as the economic outlook continues to deteriorate. "The ongoing tightening of bank-credit standards and the further weakening in demand for bank loans strengthens our belief that the euro-zone credit cycle is turning sharply lower," ING Bank economist Martin van Vliet said. "This, coupled with a protracted period of economic weakness, should induce the ECB to refrain from further rate hikes and may even set the scene for a reversion to lower rates next year."

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