ECB Says Banks Tightened Credit Standards Further

European banks continued to tighten credit standards for companies and households in the second quarter as the sovereign debt crisis impaired their access to funding, the European Central Bank said.

“The downward trend in the net tightening of credit standards on loans to enterprises, which came to a halt in the first quarter of 2010, was reversed in the second quarter, increasing from 3 percent to 11 percent,” the Frankfurt-based central bank said in its quarterly Bank Lending Survey today. “Looking forward, euro-area banks anticipate credit standards on loans to enterprises to tighten somewhat in the third quarter.”