Banks, Credit and Business Cycles - Part 2
Monetary review, 2nd Quarter 2013
During the crisis, it has become more difficult to obtain bank loans since credit
standards have been tightened from a lenient pre-crisis level. Firms with sound
finances have found it easier to obtain loans than firms with poor economic
performance. Only a limited share of firms have stated financial constraints as
impediments to production, but the picture varies among industries. Many firms
and households have opted for a consolidation path, and corporate confidence
in the banking sector's willingness and ability to always meet the demand for
credit and liquidity in an economic downturn may have weakened. This has
dampened the demand for credit. There are no indications that the banks'
lending capacity has generally been an impediment to the development in
lending. Total credit remains high in a long-term perspective.