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ECB Says Credit Standards Improve as QE Program Supports Lending

  • Credit terms for companies ease as mortgage conditions tighten
  • Banks see QE as drag on profitability over next 6 months
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ECB Ponders More QE as Deflation Expectations Grow

The European Central Bank said lending conditions largely continued to improve in the third quarter, spurred by its asset-purchase program and tighter competition among banks.

Credit standards on loans to companies eased for the sixth consecutive quarter, the ECB’s Bank Lending Survey showed on Tuesday. Terms for mortgages tightened, with banks citing national regulation as the primary cause. A small majority of lenders reported an increase in profitability over the past six months as a result of the central bank’s quantitative-easing program, though a deterioration is seen over the next two quarters.