easing of credit standards for loans to enterprises (-5%, from -3% in the previous quarter, see
Chart 1 and Table 1), mainly driven by banks’ liquidity positions. In addition, the ongoing
improvement in banks’ access to market funding and their capital positions had a slight easing
impact. Across the largest euro area countries, banks’ cost of funds and balance sheet
constraints contributed to a net easing of credit standards in France and Italy, driven in
particular by banks’ liquidity situation. The impact of banks’ cost of funds and balance sheet
constraints was zero in Germany and Spain, while contributing again to a net tightening on
account of banks’ capital positions in the Netherlands.
In addition, euro area banks reported a further net easing impact of competitive pressures on
credit standards for loans to enterprises, among the largest countries driven by developments in
France and Italy as well as, marginally, also in Germany, while Spanish and Dutch banks
reported a neutral impact.
Finally, banks’ risk perceptions concerning firms’ business outlook and macroeconomic
uncertainty had a marginal easing impact on credit standards for loans to enterprises after a
slight net tightening impact in the previous quarter (-1%, from 2%). This reflected primarily a
turnaround in the firm-specific outlook and to a marginal extent in expectations regarding the
macroeconomy. By contrast, banks’ assessment of the risk on collateral demanded continued to
have a slight tightening impact on credit standards. With regard to the largest euro area
countries, banks’ risk perceptions had a neutral impact on credit standards.
The net easing of credit standards on loans or credit lines to enterprises in the fourth quarter of
2014 continued to translate into more favourable terms and conditions applied by banks when
granting new loans to enterprises. Terms and conditions exhibited substantial further
improvement on the previous quarter. The net percentage of euro area banks reporting a further
narrowing of their margins on average loans to enterprises increased slightly while remaining at
an elevated level (24% in net terms reported a further narrowing; see Chart 2 and Table 2)
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