Following last Wednesday's ECB April Conference where the quantitative easing programme and its effect on the European corporate bond market were high on the priority list, the ECB has now published its Quarterly Bank Lending Survey. This survey sheds light and reveals important information about lending activity undertaken by European banks.
The March survey indicated that overall banks have eased their credit standards for enterprises and further easing in this regard is being foreseen. Linked to quantitative easing, this is expected to affect profits, capital and leverage positively. Therefore, if European banks really prove to be more willing to lax their tenure on their corporate lending standards, a stabilisation of the European economy is to be expected.
On a local level, SMEs seem to still be struggling with obtaining access to funds (DBRS). Malta is currently actively planning to set up its own Development Bank aimed at addressing this issue amongst other project areas. Now that this QBL survey has been published and the prospects for corporate funding appear to be quite positive on a European level, it will be interesting to find out whether banks locally are to form part of the wider European scenario or maintain their current demanding standards.
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