European region's private sector loans declined further last month as investors gain less interest for spending. Banks now have increased control over lending as they try to balance their funds.
Loans to the private sector declined by 1.1%, according to data released by the European Central Bank or ECB. This is slightly worse that the predicted outcome of 0.9% by economists in a poll conducted by Reuters.
The ECB's data puts the region's main issues forward as leaders in the Euro zone gather in Brussels for a summit. The summit will discuss possible ways to revive smaller company loans.
Global Insight's Howard Archer said, "The further marked fall in lending to euro zone businesses in May maintains pressure on the ECB to come up with concrete measures aimed at improving credit availability to companies, especially small and medium-sized ones."
"This is clearly a major focus for the ECB at the moment, as it looks to expand its policy toolbox to try and help overcome different financing conditions across the euro zone," he said.
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