I’ll spend, spend, spend! Banks open safes: cheap credits and easy loans while ECB fights as a brewing crisis. Credits: Shutterstock, Tibor Duris
Banks in Spain and other parts of Europe are rolling their sleeves, loosening their wallet strings, and giving out loans on better terms to stop many economists fearing the next big financial storm.
The banking sector has already got some hints and rolled the ball as the European Central Bank (ECB) prepares for an interest rate decision on Thursday, April 17th. Many Spanish customers have recently received credit card offers and have also received mortgage offers notifications through the banking app. The credit is now flowing freely, and it’s cheaper – all parts to alleviate the blow from the full storm of trade tensions supported by Donald Trump’s tariff Tyrades revival, the bluffing growth, geopolitical instability, and the complete storm of trade tensions.
Money speaks – and it says, “Use!”
Spanish banks are one of the first actions aimed at bringing life to the shaking of the eurozone economy following the ECB’s recent string of interest rate cuts. According to the latest from the Bank of Spain Bank lending surveyReleased on April 15th, the financial institution relaxed the credit terms for mortgages and business loans in January and March 2025.
This means that not all credits are created equal, but there are lower interest rates, longer repayment terms and more generous loan amounts. Consumer loans don’t see the same generosity, but the conditions remain mainly It has not been changed. The Bank of Spain pointed out that if you bought a house or run a business, you only got it by renting it. a bit There is less pain.
Will a crisis occur?
This change comes as storm clouds gather in the global economy. Trade tensions, astounded by Trump’s tariffs, mandate that Europe is having an impact. The European Commission predicts that obligations could be shave Up to 0.6% off EU GDP by 2027.
But it doesn’t just give Trump tariffs, it also gives economists a sleepless night. Spain itself Applied Economics Research Foundation (Fedea) warns that the crisis is already knocking on the door with Spain.Due to structural weaknesses and sustained budget deficits, they are not ready to face it.
The broader economic background is not hilarious at all. The war in Ukraine has already been heavily overwhelmed by the growth of the EU, and the ECB is urging it to launch its current expansion policy. This is a cycle of interest reductions aimed at promoting spending and investment despite the remains of inflation.
House parties: Mortgages are on the rise
So far, the policy appears to be working. The fourth quarter running, led by a surge in mortgage applications, saw a full rise in credit demand. Additionally, while companies sought more funds to invest primarily in fixed assets, their appetite for loans was less greedy than homeowners. Consumer borrowings were slashed slightly.
Financial institutions choked this increased demand, and you guessed – the decline in interest rates. In the housing market, borrowers also appeared to be motivated by positive expectations regarding real estate prices.
The banks are looking forward to the same in the second quarter. It’s stable lending standards and growing demand.
There is no panic over bad debts yet
Interestingly, despite the increase in lending, banks report that bad debts have not dented their credit strategy. And they don’t expect them, at least in the upcoming quarter.
For now, that’s what all systems go. Banks are doing their part, ECBs are offensive, and borrowers enjoy rare windows of opportunity. The question is, how long can this balancing act last?
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