Italian business lending standards ease as loan demand weakens
Italian banks slightly eased business lending standards in Q3 2026 as competition increased, while firms' loan demand contracted mildly. The Bank of Italy's October 27 survey reports further tightening in consumer credit.
Competition eases terms for firms
Mortgage credit standards were unchanged, while lower risk tolerance drove further tightening in consumer credit.
Firms' loan demand fell as fixed investment borrowing needs declined and internal financing increased.
Inventories, working capital, debt refinancing and restructuring provided limited support.
Mortgage and consumer credit demand remained stable.
For Q4 2026, banks anticipate slight tightening for firms and mortgages, further tightening for consumer credit and broadly unchanged demand from firms and households.
Non-performing loan shares and other credit quality indicators did not affect credit supply policies in Q3; banks anticipate no additional tightening from these factors in Q4.
Higher rates constrain funding access
Access to deposits and debt securities deteriorated, mainly because interest rates rose.
For Q4, banks anticipate slightly better deposit access but further deterioration for medium- to long-term debt securities.
Changes in the European Central Bank's monetary policy asset portfolio had no impact on banks' financial position or lending policies over the past year; banks foresee a marginal overall impact over the next year.
Eleven major Italian banking groups participated in the survey, which ended on October 6, 2026.
Digital assets leave lending unchanged
Most banks reported no exposure to unbacked crypto assets, tokenized assets or stablecoins in response to a new survey question.
Those with exposure reported benefits for business strategies through the extent and pace of digitalization.
No banks reported an impact on lending standards.