Bank lending in Q3 ‘more restrictive’

THE Irish bank lending environment became “more restrictive” during the third quarter of this year, despite a marginal rise in the demand for business loans, according to a Central Bank survey.

The Irish element of the overall eurozone bank lending survey (BLS) published yesterday showed that while actual credit standards, demanded by the banks, changed little from the second quarter when they were noticeably tightened (to include higher interest rates and more restrictive terms) Irish banks found it more difficult to access funds on the international markets.

“Credit standards on loans to enterprises were unchanged during the third quarter of 2010. However, costs related to banks’ capital position, more restrictive liquidity positions and increased perception of risk all contributed to a more restrictive credit environment,” the survey noted.