On July 21, 2026, the latest Bank Lending Survey (BLS) revealed that euro area banks experienced a moderate tightening of credit standards for business loans and consumer lending during the second quarter of 2026. Specifically, 7% of banks reported increased restrictions on loans to enterprises, while the tightening for household loans was rated at 9% for home purchases and 12% for consumer credit.
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The tightening of credit standards for businesses was lower than the 19% anticipated in the previous survey, attributed primarily to heightened perceived risks associated with geopolitical and energy factors. Banks indicated they remained cautious, especially regarding sectors like the automotive and energy-intensive manufacturing industries.
In terms of loan demand, there was a slight increase for business loans (net percentage of 3%), which contradicted earlier expectations of a decrease by 10%. This demand was driven by needs for inventory, working capital, and debt restructuring. Conversely, demand for housing loans decreased significantly, with a net percentage of -15%, influenced by declining consumer confidence and fluctuating interest rates.
For consumer credit, a net decline of -2% was noted, against expectations of an increase in demand. The factors affecting this decline included lower consumer confidence and reduced spending on durable goods.
Banks also reported a slight deterioration in access to retail funding, debt securities, and money markets. They expect further declines in these areas over the next three months, while access to securitizations is projected to remain stable.
As for credit standards, banks highlighted the impact of non-performing loan ratios and other credit quality indicators, particularly affecting loans to firms and consumer lending. They anticipate a continued tightening in these standards moving forward.
Nevertheless, loans to green firms have seen an easing of credit standards, indicating a positive shift in demand driven by climate-related financing initiatives. In particular, banks reported a favorable impact on loans for buildings with good energy performance, contrasted by tightened standards for less efficient structures.
The survey, conducted from June 15 to June 30, 2026, involved responses from 159 banks, achieving a 100% response rate. These results offer insights into the evolving climate of bank lending within the euro area.