Bank lending conditions provide early barometer of cyclical shifts in Finnish economy

Abstract

The lending conditions specified by banks will influence the amount of lending they make and may also reflect the general state of the economy. Bank lending conditions refer to banks’ credit standards and terms and conditions for new loans. Data on the demand for and supply of bank loans in Finland is obtained four times a year through the euro area bank lending survey. Changes in bank lending conditions in Finland largely precede changes in the level of investment especially, but also changes in GDP to some extent, while the connection with lending is somewhat looser.