Euro-area banks report record deterioration in retail-funding access

Euro-area banks reported a net 9% deterioration in retail-funding access, the strongest reading since the ECB survey began in 2011. The European Central Bank still described the deterioration as moderate. Borrowers faced higher loan rates, with banks citing tighter lending standards and funding constraints. The ECB's Oct. 26 enterprise-financing survey showed 46% of firms reported higher bank-loan interest rates. Separately, ECB data showed September annual growth of 3.5% in broad money, 4.2% in adjusted corporate loans and 3.1% in adjusted household loans. The survey's response base covers firms that applied for bank loans, credit lines or overdrafts, with a changed sample complicating comparisons. Higher financing costs could squeeze investor risk budgets ahead of the ECB's Oct. 29 policy decision.