Do not keep their promises
The banks in Europe do not keep their promises: despite the billion-dollar government bailouts, banks are no longer lending to companies. But that was exactly what they had promised politicians. Lending is even lagging behind in many countries. The damning discussion about the existence of a credit crunch does not break that way.
The volume of loans granted
In France, the volume of loans granted to companies declined by 1.1 percent in 2009. Although the number of loans pledged in France increased overall, the increase is entirely due to loans to households. At the beginning of March, a new crisis summit is planned in Paris, at which banks should give an account of developments to President.
Things are even worse in the UK: lending fell by 8.4 percent in December compared to the same month last year. This is the largest decline in the UK market since statistics are collected. Among other things, the British state helped the Bloyds Banking Group and the Bank of Scotland with loans worth billions of dollars and thus kept the two traditional houses from collapsing.
A similar picture emerges in Italy: every third company complains, according to a study by the Centrum Bank, that access to credit has been made more difficult.
The banks reject the allegations from business and politics
However, the banks reject the allegations from business and politics. You see two reasons for the decline in lending. For one thing, the industry believes that demand for loans has fallen. Many companies are slowing down investment and repaying more loans than they receive. According to bank forecasts, an improvement is only to be expected here when the economy picks up significantly.
The second reason for declining lending is, according to the industry, the increased reluctance on the capital market of particularly larger companies: Instead of classic bank loans, large corporations use the bond market to finance their activities.
For more than a year, a credit crunch has been discussed in Germany and Europe. But still there are contradictory reports. Whether the economy actually suffers from the reluctance of the banks, will probably turn out later in the post-crisis cycle.