(MENAFN- AFP) Europe's battered financial sector is showing further signs of healing and the European Central Bank's raft of different policy measures are contributing to this, a key ECB survey showed on Tuesday.
The ECB said its quarterly bank lending survey showed that banks are easing credit standards for loans to enterprises, an encouraging sign, since the chronic weakness of credit activity in the euro area has previously been blamed for the absence of any noticeable recovery in the 19 countries that share the single currency.
"The April 2015 bank lending survey (BLS), published today, showed that euro area banks reported a further net easing of credit standards on loans to enterprises in the first quarter of 2015," the ECB report said.
At the same time, demand for loans is increasing.
"Net demand for loans to enterprises continued to improve, mainly related to inventories and working capital and the low general level of interest rates," the report said.
The ECB has previously complained that its ultra-easy monetary policy has not been feeding through into the real economy, because banks are not passing the money on in loans, particularly to the small and mid-sized enterprises (SMEs) which are the region's economic backbone.
In an attempt to address this, the bank has cut its interest rates to new all-time lows and also unveiled a series of programmes to pump liquidity into the economy.
For example, it is making cheap funding available to banks via its TLTRO or targeted long-term refinancing operation programme on the condition that the banks will lend the cash on to businesses.
Most recently, the ECB embarked on a controversial programme of sovereign bond purchases, known as quantitative easing or QE. And that is having a positive effect, the ECB said.
"Banks indicated that they have used the additional liquidity ... for granting loans and intend to do so also in the coming months," the report said.
"In addition, banks indicated a net easing impact (of the asset purchase programme) on credit standards and credit terms and conditions, in particular for loans to enterprises, which is expected to increase in the coming months," the survey found.
Looking ahead to the second quarter, euro area banks expect a "small net easing" of credit standards on loans to enterprises and a "considerable increase" in demand for loans to enterprises, the ECB survey said.
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