Euro area banks tighten business credit as AI lending focuses on infrastructure

Euro area banks tightened business lending standards in the third quarter of 2026, while directing current and prospective AI lending more toward infrastructure providers than software developers or firms adopting AI, the European Central Bank's October survey found. A net 9% of banks reported tighter corporate credit standards, exceeding the 5% expected in the previous survey. Higher perceived risks and reduced risk tolerance drove the tightening. Several banks expect gradually rising demand for digital infrastructure loans, particularly for data centres. Most banks have yet to introduce quantitative criteria specific to AI lending. A small number increasingly consider AI risks in qualitative borrower assessments, with IT firms receiving the closest scrutiny.