Euro zone banks tighten access to credit as Iran war bites: ECB survey

Euro‑zone banks tightened lending standards in the three months to March and expect further widespread tightening into June, the ECB’s quarterly Bank Lending Survey showed. Banks cited the Iran war, higher energy prices and rising funding costs as main drivers, with tighter criteria for firms the sharpest since Q3 2023. Loan demand slightly fell as firms cut investment, though some increased inventories and liquidity needs rose for energy‑intensive firms. The survey signals deteriorating financing conditions that could curb investment and growth, lift borrowing costs, and feed into ECB policy considerations — a backdrop that may weigh on the euro (EUR/USD) and risk‑sensitive assets.