According to the April 2026 bank lending survey (BLS), euro area banks reported a further, larger than expected, net tightening of credit standards – banks’ internal guidelines or loan approval criteria – for loans or credit lines to enterprises in the first quarter of 2026 (net 10% of banks; Chart 1). Banks reported a small net tightening of credit standards for loans to households for house purchase (net 2%), whereas credit standards for consumer credit and other lending to households continued to tighten more markedly (net 15%). For firms, the net tightening was larger than expected in the previous round (6%), stood above the historical average and represented the most pronounced tightening since the third quarter of 2023, highlighting a continued cumulative tightening trend that began in mid-2025. Perceived risks to the economic outlook and lower risk tolerance of banks were the main contributing factors, with banks indicating in a dedicated open-ended question that geopolitical and energy developments exerted tightening pressure. Some banks reported additional tightening from exposures to energy-intensive firms and to the Middle East. Banks reported a small net tightening of credit standards for housing loans, while credit standards for consumer credit tightened further. For housing loans, risk perceptions had a tightening impact on credit standards, while competition had a small easing impact. Banks’ lower risk tolerance and higher risk perceptions were the main drivers of the tightening for consumer credit. For the second quarter of 2026, banks expect a widespread and more marked net tightening of credit standards for loans to firms and loans to households for house purchase and a further tightening for consumer credit.
Banks’ overall terms and conditions – the actual terms and conditions agreed in loan contracts – tightened for loans to firms and consumer credit, while they remained unchanged for housing loans.
