For now, the chain of transmission of monetary policy is installed in the tightening of credit. “This is the desired effect of our monetary policy: we want financing conditions to tighten,” Lagarde summed up in a speech delivered in Hannover on June 1st. “These increases [de tipos de interés] they are already strongly influencing bank lending, even here in Germany. And we know that, after having walked so far and so fast, a considerable adjustment is still being prepared,” warned the ECB president.
Loans to households have become more expensive in the euro zone by an average of 1.83 points, between April 2022 and the same month of 2023. In countries like Lithuania, Latvia, Portugal or Estonia, the increase is around or exceeds three points. In Spain this increase, until April, is 1.95 points. However, only in mortgages, the rise in the Euribor will translate into a rise of more than three points for 2.7 of mortgage loans subject to review in the first part of this year. It is not surprising that with this scenario, the sale of homes has accelerated its fall in April, with a decrease of 8.1% compared to the same month of 2022. the companiesthe interest rate has risen an average of 2.87 points in the euro zone, since April 2022. The increase exceeds three points in Portugal or Italy and stands at 2.77 points in Spain.
As a consequence of this tightening, “as of November, monthly credit flows to companies have been negative on average,” according to Lagarde. “Credit standards are tightening, which portends lower loan flows to come & rdquor ;, she added. The latest survey of bank credits anticipated the greatest rate of tightening since the 2011 crisis. After all, as the ECB president said, “this is the desired effect of our monetary policy& rdquor ;.