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Euro zone lending takes another hit in May
Global Banking and Finance Review
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(Reuters) – Euro zone bank lending slowed further in May, dragged down by higher interest rates and a recession in the bloc’s vast manufacturing sector, European Central Bank data showed on Wednesday.
(Reuters) – Euro zone bank lending slowed further in May, dragged down by higher interest rates and a recession in the bloc’s vast manufacturing sector, European Central Bank data showed on Wednesday.
The ECB has been raising interest rates at the fastest pace on record over the past year to combat stubborn inflation, weakening demand for bank credit and slowing everything from the housing market to construction and consumer spending.
Lending growth to businesses in the 20-nation currency bloc dipped to 4.0% in May from 4.6% a month earlier while household credit growth slowed to 2.1% from 2.5%.
Growth in the M3 measure of money circulating in the euro zone meanwhile fell to 1.4% from 1.9%, coming just below expectations for 1.5% in a Reuters survey.
(Reporting by Balazs Koranyi; Editing by Francesco Canepa)
Bank lending refers to the process where banks provide loans to individuals or businesses, allowing them to borrow money with the expectation of repayment with interest over time.
The European Central Bank (ECB) is the central bank for the euro and is responsible for monetary policy in the Eurozone, aiming to maintain price stability and manage inflation.
Monetary policy is the process by which a central bank manages the supply of money and interest rates to achieve specific economic goals, such as controlling inflation or stabilizing the currency.
Credit growth refers to the increase in the total amount of credit available in the economy, often measured by the growth rate of loans issued by banks and financial institutions.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
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