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Eurozone bank lending continues to surge amid crisis, ECB says

Lending to euro zone companies continued to surge in May as firms relied heavily on bank credit to stay afloat amid the continent’s coronavirus-related lockdown, data from the European Central Bank showed on Friday.

With millions of people stuck at home and much of the bloc’s economy mothballed, activity came to a standstill in March and only started to remerge in May, forcing firms to find emergency cash to survive.

Lending growth to non-financial corporations accelerated to 7.3% in May from 6.6% a month earlier, its best rate since early 2009. Household lending growth meanwhile held steady at 3.0%.

Although banks initially appeared to tighten access to credit, a raft of government and central bank measures, from public guarantees to easier collateral rules, has supported lending.

Indeed, the ECB loaned 1.3 trillion euros to banks last week for at a rate as low at minus 1% provided banks at least maintain their stock of lending to the real economy.

The annual growth rate of the M3 measure of money supply accelerated to 8.9% from 8.2%, beating expectations for 8.6% in a Reuters poll.

|Reuters

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