The European Central Bank said the turmoil in financial markets has led to a tightening of credit standards in recent months, particularly on loans to large companies. “Banks reported that credit standards for loans to enterprises were more affected by the turmoil than credit standards for loans to households. In particular, the situation in financial markets had a larger impact on loans to large enterprises than on loans to small and medium-size enterprises,” the ECB said in its latest bank lending survey. As announced on Thursday by ECB President Jean-Claude Trichet, the survey showed that a net 49 percent of banks tightened standards on lending to companies in the first quarter, while a net 33 percent of banks tightened credit standards on loans for house purchases. The ECB said a net 54 percent of banks said the financial market situation had prompted them to tighten credit standards for loans and credit lines to large companies, compared with a net 34 percent in the case of loans to smaller companies, 29 percent on loans to households for house purchases and 19 percent for consumer credit and other loans to households.
