Banking sector on the mend

The ECB said Tuesday that its bank lending survey for the second quarter of 2015 had also revealed that households were finding it easier to gain access to credit to purchase a home.

The development was widely cheered because weak credit activity has often been cited as a central reason why eurozone economies weren't quicker to recover from the global financial crisis.

The ECB has also complained that its loose monetary policy, which has seen the central bank pump 60 billion euros ($66.2 billion) into the economies of the 19 countries that share the common currency and lower interest rates to all-time lows, has not trickled down into the real economy because banks weren't passing that money along in the form of loans.

The fact that businesses and homeowners were now finding it easier to get a hold of credit was an encouraging sign that the ECB's policies were finally having the desired effect and that the economy would continue to improve.

The ECB said competition among banks was the main driver behind the easing of credit standards. At the same time, demand for loans was also increasing.

"Net demand for loans to enterprises increased substantially, owing mainly to the general level of interest rates," the ECB said after publishing its survey, in which 142 banks were questioned from June 9 to June 24.

cjc/ng (AFP, Reuters)