الأربعاء، 28 نوفمبر 2012

Lending in Euro Zone Continued to Fall in October

FRANKFURT — The volume of credit in the euro zone continued to decline in October, according to official data released Wednesday — another sign that the region is stuck in recession.

A rise in home loans, however, was seen as a possible indication that bank lending, which is crucial to economic growth, may be poised for a turnaround.

Loans to the private sector fell at an annual rate of 0.7 percent in October, the European Central Bank said. That was a slightly slower decline than in September, when lending fell 0.9 percent.

The data showed that extraordinary efforts by the E.C.B. still have not restored the flow of credit to countries like Spain that need it most. The E.C.B. has cut official interest rates to record lows and flooded banks with cash, but lenders have been reluctant to give credit to customers — or else customers have not wanted to borrow money because they were too pessimistic about their economic prospects.

But some analysts said the data contained tentative grounds for optimism. Loans for home purchases rose at an annual rate of 1.3 percent in October, accelerating from a rise of 0.7 percent in September. Mortgage lending is considered a leading indicator that could signal a broader recovery in credit.

“That might offer a glimmer of hope that the credit cycle could turn upwards in the course of 2013,” Peter Vanden Houte, an analyst at ING Bank, wrote in a note. He and other analysts said that the improvement meant that the E.C.B. was unlikely to cut its benchmark interest rate from an all-time low of 0.75 percent when it meets next week.

At the same time, the data showed that bank lending is still far from healthy. Loans to corporations, not including banks, fell 1.8 percent in October, a steeper decline than in September, when loans to business fell 1.5 percent.

Michael Schubert, an analyst at Commerzbank, said that corporate lending in the euro zone might not be as weak as the figures imply. Companies are increasingly raising money by selling corporate bonds, rather than borrowing directly from banks, he said.

In fact, the percentage of their credit that companies are raising on financial markets is at its highest level in the history of the euro zone, Mr. Schubert said.

European companies are much more dependent on bank lending than their counterparts in the United States, who are more likely to issue bonds. U.S. companies raise about 70 percent of their financing on capital markets, according to Commerzbank, compared to only 20 percent in the euro zone.

In some cases, euro zone companies can raise money on capital markets more cheaply than beleaguered euro zone banks can, because investors consider companies to be better credit risks. That form of credit does not show up in the E.C.B. bank lending statistics.

The E.C.B. data give “an at least somewhat distorted picture about what is actually happening to corporate financing,” Mr. Schubert wrote in a note. “Businesses in the euro zone have partially replaced bank loans by issuing bonds.”

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