Recent Developments in Financing and Bank Lending to the Non-financial Private Sector

25 Pages Posted: 3 Feb 2021

See all articles by Pana Alves

Pana Alves

Banco de España

Fabian Arrizabalaga

Banco de España

Javier Delgado

Banco de España

Jorge Galán

Banco de España

Eduardo Perez Asenjo

Banco de España

Carlos Pérez Montes

Banco de España

Carlos Trucharte

Banco de España

Multiple version iconThere are 3 versions of this paper

Date Written: January 29, 2021

Abstract

Financing conditions for households and businesses have remained accommodating in the second half of 2020, assisted by the support measures introduced by the economic and monetary authorities to contend with the fallout of the COVID-19 pandemic. However, there are signs of some tightening in credit standards, linked to financial institutions’ increased risk concerns. The recovery in economic activity since the summer has favoured a more dynamic flow of credit to individuals, while, after the large volume of financing granted to productive activities over the spring, new lending to this sector declined significantly. The strong negative impact of the COVID-19 pandemic on economic activity did not filter through in any significant way into the quality of deposit institutions’ private sector credit portfolio until 2020 Q3. Although the decline in non-performing loans observed in previous years generally slowed across portfolios in 2020, and despite the pick-up in specific portfolios, such as those relating to consumer credit, total non-performing loans have continued to decline on a year-on-year basis. Growth in the volume of public guarantees for lending to business eased in the second half of the year and the volume of credit subject to non-expired moratoria, which is concentrated mostly in banking association schemes, stabilised.

Keywords: financing, lending, households, non-financial corporations, deposit institutions, non-performing loans ratio, public guarantees, moratoria

JEL Classification: E44, E51, G21, G23, G28

Suggested Citation

Alves, Pana and Arrizabalaga, Fabian and Delgado, Javier and Galán, Jorge and Pérez, Eduardo and Pérez Montes, Carlos and Trucharte Artigas, Carlos, Recent Developments in Financing and Bank Lending to the Non-financial Private Sector (January 29, 2021). Banco de Espana Article 02/21, Available at SSRN: https://ssrn.com/abstract=3777952

Pana Alves (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Fabian Arrizabalaga

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Javier Delgado

Banco de España ( email )

Madrid 28014
Spain

Jorge Galán

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Eduardo Pérez

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es

Carlos Pérez Montes

Banco de España ( email )

Alcala 48
Madrid 28014
Spain

Carlos Trucharte Artigas

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es

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