Bank lending, therefore, rose through the end of last year to exceed, in November and December, the highest year-on-year rate of increase recorded since the publication of such statistics began. With stock prices remaining low and economic conditions deteriorating sharply, financial institutions are becoming increasingly conscious of future rises in credit costs as well as their capital constraints.
This is further worsening the severity of financial institutions' lending attitudes. Also in the area of trade credits, small firms are facing tighter settlement conditions. With the tightening of financial conditions and the decline in corporate profits, an increasing number of firms are indicating that their funding conditions are severe, and are scaling down their fixed investment plans.