Dwindling credit appetite in Europe

In Europe, the process of financial disintermediation is lagging behind that in the US, and lending is still largely dependent on banks rather than bond markets. So if the ECB wants to manipulate financial conditions, it must do so through these financial intermediaries. The most telling aspect of the current situation concerns the demand for credit rather than the willingness of banks to provide it. The majority of those responsible for lending report a decline in interest from businesses, and the extent of this decline is only exceeded in the 20-year history of the survey by the last quarter of 2008, the height of the global financial crisis.