A collapse in demand for credit is underway in Europe. Bank lending is down sharply and the decline has "surprised the experts".
I wasn't surprised in the least, but nonetheless, please consider Lending in the euro zone is declining fast, courtesy of Google translate (slightly modified by Mish) from Die Welt.
In the crisis-hit euro zone, fears rise of a credit crunch. The sharp decline in bank loans to companies surprised even the experts.
The sum of bank loans to companies and households in the euro zone shrank more than expected in September. Bank lending in comparison to the same month last year shrank by 0.8 percent, said the European Central Bank (ECB). Analysts had expected a decline of only 0.6 percent.
The lending to companies fell month on month by 20 billion euros after it was dropped in August only to six billion euros. In many countries recessionary demand for loans is naturally low.
"At least in some euro area countries, the capital constraints affect the supply of credit from the banks to the real economy," said Commerzbank expert Michael Schubert. The complaints about the business in France over high hurdles in lending would have declined in recent months, is slow. A similar picture is apparent in Italy.
Credit Crunch or No Demand?
The article bills this event as a "credit crunch". I would define a credit crunch as demand for credit that is not met. Here, I primarily see falling demand. Why businesses should want to expand in this environment is beyond me, and indeed they don't.
Read more: http://finance.townhall.com/columnists/mikeshedlock/2012/10/28/credit_crunch_in_europe/page/full/
I wasn't surprised in the least, but nonetheless, please consider Lending in the euro zone is declining fast, courtesy of Google translate (slightly modified by Mish) from Die Welt.
In the crisis-hit euro zone, fears rise of a credit crunch. The sharp decline in bank loans to companies surprised even the experts.
The sum of bank loans to companies and households in the euro zone shrank more than expected in September. Bank lending in comparison to the same month last year shrank by 0.8 percent, said the European Central Bank (ECB). Analysts had expected a decline of only 0.6 percent.
The lending to companies fell month on month by 20 billion euros after it was dropped in August only to six billion euros. In many countries recessionary demand for loans is naturally low.
"At least in some euro area countries, the capital constraints affect the supply of credit from the banks to the real economy," said Commerzbank expert Michael Schubert. The complaints about the business in France over high hurdles in lending would have declined in recent months, is slow. A similar picture is apparent in Italy.
Credit Crunch or No Demand?
The article bills this event as a "credit crunch". I would define a credit crunch as demand for credit that is not met. Here, I primarily see falling demand. Why businesses should want to expand in this environment is beyond me, and indeed they don't.
Read more: http://finance.townhall.com/columnists/mikeshedlock/2012/10/28/credit_crunch_in_europe/page/full/
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