ECB: Eurozone Crisis Drying up Credit to Households


Bank lending to private households in the eurozone contracted again in November as the region's debt crisis continues to dampen demand for credit, data showed on Thursday.

Eurozone bank loans to the private sector shrank by 0.8 percent in November from the level in the same month in 2011 after already shrinking by 0.8 percent in October, the European Central Bank said in a statement.

President Mario Draghi has said that weak lending to the private sector reflects a pessimistic view of eurozone growth prospects and heightened risk aversion amid the crisis.

The ECB also published eurozone money supply data, which suggest the money supply -- a key guide to future inflation -- is growing.

Growth in the M3 indicator, which measures the amount of money in circulation, grew by 3.8 percent in November, after already rising by 3.9 percent in October.

The ECB regards the M3 figure as a key guide to inflation pressures and uses it to set interest rates accordingly.

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