Euro area: Banks tighten slightly, wage expectations ease

Research evidence excerpt

Euro area: Banks tighten slightly, wage expectations ease

J P M O R G A N Europe Economic Research

21 July 2026

Euro area: Banks tighten slightly,

wage expectations ease

The ECB released its 2Q Bank Lending Survey (BLS) earlier today, conducted Economic and Policy Research

between 15 and 30 June, and yesterday published its Survey on the Access to Mariana Monteiro

Finance of Enterprises (SAFE), conducted between 21 May and 26 June 2026. The (44 20) 3493-5147

fieldwork for both surveys largely predates the recent re-escalation of the conflict mariana.reispaivamonteiro@jpmorgan.com

in the Middle East. However, under the assumption that the flare-up proves J.P. Morgan Securities plc

temporary (as in our baseline), one would expect responses not to have changed

materially over the past three weeks, and the results should therefore remain

informative. Below, we summarise the main highlights from the two surveys.

• Middle East shock and expectations of higher policy rates have tightened

lending conditions, but have had only a modest impact on actual bank

lending so far: Banks reported a further tightening in credit standards – i.e.,

internal guidelines and loan approval criteria – as well as in loan terms and

conditions (for example, higher interest rates) in 2Q, with manufacturers,

energy-intensive and trade-exposed firms, and SMEs facing the strongest

headwinds. However, the share of banks tightening standards was smaller than

expected at the onset of the conflict. Firms likewise reported a further

tightening in financing conditions in the SAFE survey, with higher borrowing

costs cited as a key channel. While these surveys are largely qualitative and

small moves can be hard to interpret, it is notable that, despite an increase in