reported a noticeable net easing of credit standards in France and Italy and unchanged credit
standards in Germany, Spain and the Netherlands. Turning to loan demand, the heterogeneity
across countries continued to reduce somewhat, with banks in Germany, France, the
Netherlands and particularly in Spain reporting an increase in demand for loans to enterprises
and Italian banks indicating unchanged demand. For housing loans, net loan demand was
particularly positive in the Netherlands, Italy and Germany and to a lesser extent in Spain, while
remaining unchanged in France down from a strong increase in the previous quarter.
According to euro area banks, in the fourth quarter of 2014 their access to funding further
improved in net terms for all main market instruments and for short-term retail deposits, but
developments were again heterogeneous across the largest euro area countries. For the first
quarter of 2015, banks expect further considerable net easing of their access to retail and
wholesale funding. With regard to regulatory and supervisory action, banks continued to
strengthen their capital positions in the second half of 2014, albeit less strongly than in the first
half of the year. Banks reported a decline in their risk-weighted assets after a marginal increase
in the first half of 2014 mainly driven by a further reduction in riskier loans. At the same time,
banks provided more indications that recent regulatory and supervisory actions are having a
positive impact, such as improvements in banks’ funding conditions and an easing in overall
lending conditions.
As in the previous survey round, this survey included three additional ad hoc questions aimed at
gauging the impact of the targeted longer-term refinancing operations (TLTROs) conducted by
the Eurosystem between September 2014 and June 2016. According to euro area banks,
participation in the TLTROs is mainly driven by profitability and to a lesser extent by
regulatory motives or by precautionary motives. While banks aim to use these funds
predominantly for granting loans as well as for substitution of other funding sources, the impact
on loan supply is expected to largely translate into a narrowing of lending margins. At the same
time, the January 2015 survey round also provided the first indications of an easing of credit
standards. Looking ahead to the additional TLTROs between March 2015 and June 2016, banks
remain largely undecided on their participation.
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