ECONOMY

Credit contraction sped up in November

credit-contraction-sped-up-in-november

Bank of Greece data released on Thursday showed that private sector deleveraging picked up pace in November, with outstanding loan balances dropping 2.2 percent from the previous year.

Credit contraction “returned with a vengeance in July, continued unabated in August, slowed in September, yet picked-up speed again in October and November,” Athens-based Pantelakis Securities’ analysts Paris Mantzavras and George Grigoriou wrote in a note to clients.

A 2015 stress test by the European Central Bank uncovered a 14.4-billion-euro hole in banks’ books, amid increases in bad loans, subdued economic activity, expensive emergency funding requirements and strict limits on capital transfers imposed in the middle of summer.

Private investors plugged most of the shortfall, as bank stocks lost more than 93 percent of their value in 2015.

[Bloomberg]