Eurozone credit turns a corner

ANZ has some nice charts in a note this morning covering this week’s ECB Bank Lending Survey. The worst is well over in credit availability:


And there is some new demand as well:


Leading to a reasonable prospect of a return to shallow growth in the second half:


Looks like Europe will offer something to the world in the months ahead. What happens after the German election, however, is anyone’s guess.


Houses and Holes
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    • FYI the original document ( the ECB bank lending survey) is here

      You can see from many of the metrics that the banks tend to have an overly optimistic view of what is going to happen, with the “expected” vs “actual” values being quite different in some instances.

      However, as noted by H&H many of the metrics are heading in the right direction. But that’s not the whole story.

      If you then read the ECB’s monthly bulletin ( ) and look at page 25, you get quite a different story

      “Overall, growth in loans to the non-financial private sector remains subdued in the euro area, with both supply and demand factors weighing on the pace of loan growth. Weak economic activity and persistently high levels of economic uncertainty continue to be reflected in weak demand for bank loans. At the same time, the fragmentation of financial markets, although receding in recent months, as well as credit supply constraints are curbing credit growth. Finally, the still high level of indebtedness for both households and non-financial corporations in a number of countries is also weighing on loan growth”

      That trend appears to have continued ..

      So it looks like the bank survey results are a little out of whack with what is actually occurring in reality.

  1. Cognitive Dissonance

    Don’t these things need to be recapitalised before you even put the indicator on ?

  2. Free_Market_Delusion

    IMHO I think Mike Shedlock has a better handle on what’s happening in Europe and the US.

    I will say though that the bulk of what HnH produces is excellent reading.(IMHO of course)

      • Free_Market_Delusion

        He usually does an annual summary of his predictions and the outcomes and from what I have read he has some good runs on the board. (To the best of my knowledge)

        Ultimately we read all commentators with a level of risk as no one has a crystal ball and can perfectly see the future.

        All we can hope to do is read widely and draw our own conclusions.

        The future is inherently unknown and assumptions made have statistical probabilities attached to the predicted outcome.

        Just for the record no disrespect to you HnH I genuinely enjoy and value your contributions and personally agree with the majority of what you have to say.