Eurozone South Korean Banks Tighten Lending Standards Amid Economic Uncertainty

Eurozone banks have tightened lending standards for corporate loans due to worsening economic outlook and geopolitical uncertainty, with German banks leading this trend, while credit standards for housing loans remained unchanged but are expected to tighten slightly in the fourth quarter. Demand for corporate loans increased modestly, supported by declining interest rates and refinancing needs, but overall credit growth remains moderate amid trade risks and economic concerns. In South Korea, banks are also expected to tighten lending standards in the fourth quarter, especially for household loans, as government measures target the overheated housing market by imposing stricter loan restrictions and lowering mortgage loan caps. The tightening in South Korea is reflected in a negative lending attitude index and rising average credit score requirements for household loans, indicating a shift toward lending predominantly to high-credit individuals. Both regions highlight persistent credit risk concerns amid domestic and global uncertainties, with a focus on controlling consumer and housing credit to mitigate financial vulnerabilities.