Draghi: Further Monetary Stimulus Is in the Pipeline

Since 2014, bank lending rates for firms and households have significantly decreased, reaching historical lows by April 2016. The growth rate of bank credit to euro area corporations turned positive in 2015, with favorable market conditions benefiting external finance sources. Small and medium-sized enterprises (SMEs) have experienced improved access to credit, with banks showing increased willingness to lend at lower rates. New bank credit is being used for investment projects, and further monetary policy stimulus is anticipated.

What significant change occurred in bank lending rates for firms and households between 2014 and April 2016?

• They fell by about 90 and 80 basis points, respectively.

• They increased by 90 and 80 basis points, respectively.

• They fluctuated without a clear trend.

• They remained stable.

How did non-financial corporations benefit from capital market conditions?

• By improving corporate profits and increasing retained earnings.

• By reducing their workforce.

• By closing down operations.

• By increasing their debt levels.

Which type of companies felt the easing of bank credit conditions the most?

• Small and medium-sized enterprises (SMEs).

• Large multinational corporations.

• Start-up companies.

• Government-owned enterprises.

What did a recent survey reveal about SMEs' access to finance in the euro area?

• SMEs reported a complete lack of access to credit.

• SMEs reported an improvement in access to credit.

• SMEs reported no change in access to credit.

• SMEs reported a decrease in access to credit.

What is the primary use of new bank credit to companies, as mentioned in the transcript?

• To pay off existing debts.

• To finance investment projects.

• To increase employee salaries.

• To expand into new markets.