During the second quarter, credit standards for loans to small and medium-sized enterprises (SME) were further tightened by a good majority of banks. This is largely explained by increased risk perception and costs associated with banks' capital positions. At the same time, one-third of banks report a decline in demand for credit from the SME sector.
According to Dutch banks, demand for residential mortgages continued to decline in the second quarter of 2013. Banks attribute the drop mainly to poor prospects in the housing market and low consumer confidence. During the third quarter, however, banks do not expect to see demand for residential mortgages to fall off further. Very few banks, in fact, are counting on a slight increase in residential mortgage demand (Chart 1).