LONDON (MarketWatch) -- Credit conditions in the euro zone continue to raise concerns despite extraordinary efforts by the European Central Bank to kick-start credit flows, economists said.
The Munich-based Ifo Institute on Wednesday said its monthly credit indicator showed that credit constraints for German trade and industry "clearly sharpened" in July, with 45.1% of firms saying lending policies in the euro zone's biggest economy were restrictive, compared to 42.4% the previous month.
Compared to some other euro-zone countries, Germany has largely avoided the worst of the credit crunch. But concerns about the health of the nation's banking sector have fueled worries that tougher conditions could be yet to come, potentially choking off a recovery.
Ifo said tighter credit conditions were the result of massive equity capital losses by banks in the wake of the financial crisis.
http://www.marketwatch.com/story/european-credit-worries-wont-go-away-2009-07-29
The Munich-based Ifo Institute on Wednesday said its monthly credit indicator showed that credit constraints for German trade and industry "clearly sharpened" in July, with 45.1% of firms saying lending policies in the euro zone's biggest economy were restrictive, compared to 42.4% the previous month.
Compared to some other euro-zone countries, Germany has largely avoided the worst of the credit crunch. But concerns about the health of the nation's banking sector have fueled worries that tougher conditions could be yet to come, potentially choking off a recovery.
Ifo said tighter credit conditions were the result of massive equity capital losses by banks in the wake of the financial crisis.
http://www.marketwatch.com/story/european-credit-worries-wont-go-away-2009-07-29