2023-05-21 15:30:15
fot. freepik.com
It can be seen that new loan operations to non-financial corporations increased notably during the first three months of the crisis, from the end of March to June. According to the Bank of Spain survey on bank loans, in said period there was a significant increase in the demand for credit by companies as a result of both the increase in their liquidity needs, given the abrupt fall in their billing, and the desire to have a liquidity cushion in an environment of high uncertainty.
The lines of public guarantees contributed to the increase in the supply of credit to meet this growing demand
As can be seen from this survey, financial institutions relaxed the criteria for granting and the conditions applied to loans granted to companies and the self-employed within the State guarantee program, especially in the case of those for SMEs and individual entrepreneurs ( self-employed) during the second quarter of the year. On the other hand, in operations without guarantees there would have been a tightening of the concession criteria.
It is clear that the calentologists want to cause a food crisis. pic.twitter.com/Y124tsocAV
— David Battaglia (@DBATTAGLIAYtube) May 21, 2023
All of this would explain why the weight of guaranteed loans exceeded 60% of new credit granted to non-financial corporations during the second quarter of 2020
In the second half of the year, a moderation was observed in the total volume of new loans granted to non-financial corporations, due both to a slight contraction in the demand for credit and to a certain tightening of the criteria for granting loans by financial entities2. Applications for guaranteed loans fell during the second half of the year, as the maximum amount of the public guarantee line was reached.
Graph of the quotes of the total volume of new loan operations
During the first months of the crisis, parallel to the increase in new credit, there was an increase of around 50,000 million euros in the holding of deposits by non-financial corporations
The outstanding balance of sight and term deposits of these companies, which had remained almost unchanged from March 2019 to March 2020, experienced a notable increase, close to 20%, during the first months of the crisis and climbed from just over 250,000 million at the end of February 2020 to a figure close to 300,000 million euros at the end of June 2020, a level at which it remained until the end of the year (see Chart B2.2). The reason for precaution mentioned above would justify the decision of companies to increase the liquidity held in deposits, 90% of which was in deposits available on demand. It is possible that the expectation of a possible tightening of future financing conditions would have led companies to request financing in advance, taking advantage of the advantageous conditions offered by the ICO lines to face possible liquidity needs later, given the environment of uncertainty about the evolution and duration of the crisis.
#Upward #trend #Notable #increase #loans #deposits #crisis