The Fragmentation Trade in Europe

When there's a decline in liquidity, the availability of credit also shrinks. This typically correlates with economic activity after a short time span as well. And if we look at the most recent survey from Europe, ECP published this quarterly lending survey today. As you can see here on the chart, we are now back at crisis levels when it comes to the appetite for loans. We also back atrisis levels when we look at credit standards. So basically banks have tightened up standards quite a lot over the past quarter. Next Monday, we get the similar survey out of the US and I would expect very similar results.