FRANKFURT -- A bleak economic outlook prompted banks in the euro zone to further tighten their credit standards in the third quarter, and companies and households will probably face even tougher requirements in the fourth quarter, the European Central Bank said.
The finding, in its latest survey of credit conditions, represented the fifth consecutive quarter in which euro-zone banks tightened standards for loans to companies.
"Expectations regarding future economic activity and the industry or firm-specific outlook" prompted the move, the ECB said.
The survey showed that 65% of the 111 banks polled by the ECB tightened standards applied to loans or credit lines to enterprises in the third quarter. None of the banks eased lending requirements. Banks expect to further tighten corporate credit standards in the fourth quarter.
It also showed that 37% of banks polled tightened standards on loans to households. "The net tightening of credit standards for consumer credit and other lending to households is expected to be stronger" in the fourth quarter, it added.
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