enterprises. Euro area banks also reported, in net terms, that all components of the other terms
and conditions became more favourable in the fourth quarter of 2014. More specifically, less
stringent conditions were applied with regard to the size of loans or credit lines, loan covenants
and loan maturity. As in the previous quarter, a considerable net percentage of banks in all of
the largest euro area economies reported a narrowing of the margins on average loans, except
for the Netherlands where banks indicated a widening of these margins. In Spain and Italy, half
of the banks participating in the survey reported a narrowing of the margins on average loans.
At the same time, only banks in Germany and to a marginal extent in France reported a
narrowing of the margins on riskier loans, whereas banks in Spain, Italy and the Netherlands
reported no changes to these margins.
Overall, the developments described above suggest a substantial further improvement in
financing conditions for loans to enterprises. While the improvement was considerably stronger
for average loans, the aggregate narrowing of margins on riskier loans was only marginal,
masking heterogeneous developments in particular across smaller countries.
2.1.2 RISE IN NET DEMAND FOR LOANS TO ENTERPRISES
Net demand for loans to enterprises (i.e. the difference between the sum of the percentages of
banks reporting an increase and that of banks reporting a decline in demand) continued to
recover in the fourth quarter of 2014 (see Chart 3 and Table A). The net demand for loans to
enterprises increased to 18%, from 6% in the previous quarter, remaining above its historical
average and largely in line with banks’ expectations for this quarter at the time of the previous
survey round. Across countries, heterogeneity in net demand for loans to enterprises continued
to decrease somewhat with banks in Germany, France, the Netherlands and particularly in Spain
reporting an increase in demand and Italian banks indicating unchanged demand.
Looking ahead, for the first quarter of 2015, euro area banks expect a further net increase in
demand for loans to enterprises (see Chart 3)
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