Annualized data out of the euro zone this morning revealed a mildly sluggish growth in private loans issued throughout the region. The data seems to suggest either banks’ unwillingness to lend out money from tight financials, or individuals not pursuing loans out of economic pessimism. Either way, it does not bode well for the euro zone.
Supporting this data was Friday’s publication of the M3 money supply, also presented in an annualized format, which revealed lower than expected growth in the amount of local currency in circulation domestically. A reduction in the amount of private loans issued and slower-than-expected growth in the domestic money supply seems to point towards unwillingness by the European Central Bank (ECB) to loosen its grips on the EUR in an attempt to stabilize the market. Given the weakness felt in EUR values these past few weeks, the move does not seem unjustified.
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