Lending to companies and households in the euro area fell the most on record in August, signaling that the economy is still struggling to recover from its longest-ever recession.

Loans to the private sector dropped 2 percent from a year earlier, the Frankfurt-based European Central Bank said today. That's 16th monthly decline and the biggest since the start of the single currency in 1999. Adjusted for loan sales and securitization, lending contracted 1.5 percent in August.

The ECB has pledged to keep interest rates at or below current levels to support the 17-nation euro economy, which expanded 0.3 percent in the three months through June after six quarterly contractions. ECB President Mario Draghi said this month that while there has been "substantial progress" in bank funding, non-financial corporations are still suffering from "weak loan dynamics."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.