Just a few weeks ago, economics minister Wolfgang Clement said the main impediment to economic growth was the restrictive lending policy of banks. He promised to work with the government's financing agency (KfW) to make sure that the money goes where it is needed: to the country's thousands of small- and medium-sized enterprises (SMEs).
In its report on the euro-zone money supply and bank lending for the first half of this year, the Bundesbank tells a different story. Its data suggest that low demand, not tighter lending criteria, causes banks' lending portfolios to shrink.
In the first half of this year, euro-zone monetary growth was stimulated primarily by lending to domestic enterprises and households, Germany's central bank said. Loans to the private sector expanded by an annualised three-month rate of eight per cent.
