Market Minds

For all the cheering about the recovery one might think actual jobs were being created or bank lending was increasing. Neither is true in the US or the Eurozone. About a month ago the Sydney Herald reported Eurozone private sector lending almost stalls . Eurozone private sector lending has nearly stalled, the European Central Bank warned on Friday, posing a threat to what is likely to be a weak recovery from the 16-nation bloc’s first recession. Growth in loans to the private sector dropped to 0.1 percent in August from a previous record low of 0.7 percent in July, an ECB spokesman said. Capital Economics European economist Ben May said “there are still few signs that the ECB’s provision of unlimited liquidity to banks is boosting broad money and credit growth.” Eurozone banks have been criticised by politicians and business leaders for failing to pass on cheap central bank funds to the wider economy and the ECB has also pressed the banks to do their part to support a recovery. Private-sector lending in the eurozone drops Inquiring minds note that Private-sector lending in the eurozone falls for first time THE fragile nature of the recovery in the eurozone was highlighted yesterday in figures showing the first decline in private-sector credit since data was first collected in 1991. Despite record-low interest rates and efforts to flood the eurozone with funds, the region’s banks have cut the volume of loans to customers. Loans to eurozone households and firms fell 0.3pc in September from a year earlier, the European Central Bank (ECB) said. On a monthly basis, lending rose slightly.

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Eurozone Unemployment At Record Highs; Private Sector Lending Drops First Time Ever