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Lending conditions for euro zone companies ease on ECB stimulus

European Central Bank President Mario Draghi
Francois Lenoir | Reuters
European Central Bank President Mario Draghi

Credit standards for euro zone companies eased more than expected in third quarter of the year as banks, awash with central bank money, competed for customers, a European Central Bank survey showed on Tuesday.

Banks said they were using additional liquidity from the ECB's 60-billion euros a month asset-purchase program to grant loans, providing some comfort to the ECB as it looks for evidence that its scheme is working its way into the economy despite anaemic inflation.

Companies' demand for loans also rose, albeit less than expected, and a "further considerable increase" was expected in the last quarter of the year, the ECB's quarterly Bank Lending Survey of the euro zone's largest banks showed.

Meanwhile on Tuesday, Bank of Spain Governor Luis Maria Linde said that the European Central Bank could extend and modify its asset purchase program.

"If the (ECB) deems it necessary, it could use the flexibility it has given the acquisition program to extend its size ... or modify its composition," Linde said.

Linde also said that current inflation levels in the single currency bloc were worryingly below the ECB's target of near 2 percent.

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