Bearing in mind the stricter capital requirements, it is not surprising that their repercussion on banks’ activities make them wary when it comes to increasing their lending. That being said, the weak credit dynamics in the euro area are also caused by the moderate economic recovery and the persistent need to deleverage in the banking sector and the nonbank sector.
The biggest negative contribution of 1.7 percentage points of GDI was in the year to March 1975 (following a massive positive contribution the previous two years). The magnitude of these effects is such that, although they have made a noticeable contribution to slowing the economy, they would not be enough to cause a recession.