Bank lending increased 0.1 percent in March from a year earlier, the ECB said in a statement on Wednesday. Loans had posted annual declines in every month since May 2012. Lending climbed 0.2 percent from February.
The ECB has used an array of unconventional tools to encourage credit flows to bolster the region’s sluggish economic recovery. The central bank’s quarterly survey published this month showed the measures are spurring lending even as financial institutions feel the pinch of tighter margins.
“With its more aggressive stance, the ECB is finally bringing the euro zone back to at least trend growth,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Money and credit point to a firming business cycle.”
The euro fluctuated after the report and was up 0.2 percent at $1.1003 at 11:13 a.m. Frankfurt time.
ECB President Mario Draghi told reporters after the April 15 policy meeting that risk aversion among banks has faded. Executive Board member Benoit Coeure said in comments published on the ECB website on Tuesday that “there is no reason to worry about the euro area recovering in 2015 and 2016.”
The central bank has bought covered bonds since October and asset-backed securities since November, and expanded purchases to include sovereign debt in March. It intends to spend a total of 1.1 trillion euros ($1.2 trillion) through September 2016. In addition, it handed 97.8 billion euros in targeted loans to banks on March 19 in the third round of a program designed to boost lending.
The ECB says
euro-area economic growth will be 1.5 percent this year and climb to 2.1 percent by 2017 -- a pace of expansion the region hasn’t seen since 2007 -- as long its monetary stimulus is fully implemented. Draghi has warned that governments should use the opportunity to make reforms to turn a cyclical recovery into a structural one.
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