The dreadful state of European bank lending

Eurozone is staring recession in the face. The ECB has over-tightened. It should cut interest rates now.

When bank lending slows, so does the economy. Central banks have been applying downwards pressure to bank lending in the hope of taming inflation. The ECB’s interest rate rises have had a particularly exorbitant impact. European bank lending has fallen off a cliff.

(this chart and the following two are from the ECB)

Lending to households is barely growin…