Eurozone banks tighten business and consumer lending as loan demand falls
Eurozone banks tightened standards for business loans and consumer credit in the third quarter of 2026, while demand fell for business, housing and consumer loans, the ECB’s October Bank Lending Survey found. Banks cited higher interest rates, weaker confidence and greater risk perceptions; they expect further tightening in the fourth quarter.
Bottom line — A net 27% of banks reported falling housing-loan demand in the third quarter, and 36% expect it to decline further.
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A net 9% of banks tightened business-loan standards, above the 5% that had expected to do so.
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Housing-loan standards were unchanged, while a net 14% of banks tightened consumer-credit standards.
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Business-loan demand fell by a net 6%, reversing banks’ previous expectation of a 4% increase.
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Consumer-credit demand fell by a net 2%, contrary to expectations that it would remain unchanged.
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Banks reported more rejected applications across all borrower groups, with the increase strongest for consumer credit.
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Banks expect AI-related lending to grow gradually, especially for digital infrastructure such as data centres.
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Banks said access to retail funding, debt securities and money markets worsened; retail-funding access deteriorated the most since the series began in 2011.
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The survey covered 159 banks and was conducted from 21 September to 6 October.