News Column

Emerging Market Bank Lending Conditions Ease for First Time Since Early 2013

July 30, 2014

WASHINGTON, July 30 -- The Institute of International Finance issued the following news release:

Bank lending conditions in emerging economies eased in 2014Q2, according to the latest Emerging Markets Bank Lending Conditions Survey from the Institute of International Finance.

"Overall lending conditions in emerging markets eased for the first time since early 2013," said Charles Collyns, chief economist for the IIF. "This primarily reflects better bank funding conditions, helped by increased risk appetite in financial markets, consistent with our recent portfolio flows tracker."

The composite index of the IIF's Survey increased 2 points to 50.2 in 2014Q2. A value above 50 indicates improving lending conditions.

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Both domestic and international funding conditions improved after being tightened sharply since 2013Q2 when market became concerned about the path of the Federal Reserve's exit from quantitative easing. Many emerging markets are benefiting from a recovery in mature economies which has improved conditions for trade finance.

Nonperforming loans continued to increase, a trend that banks expect to extend into 2014Q3 according to the survey. The IIF noted that this may explain the continued tightening in credit standards for loans, a trend that has persisted since 2011Q1.

Emerging Europe saw a significant improvement in bank lending conditions while Latin America saw bank lending conditions deteriorate further. Emerging Asia continued to see the sharpest tightening in bank lending conditions.

For more information on the Survey, visit

[Category: Financial Services]

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Source: Targeted News Service

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