Current lending in Europe (central Europe) is in a status of low interest rates, lower wages for the employees (bankers) and primary forcus on the return of the bank on equity. As the price of the equity is qrowing (higher stock prices) we shall be looking on the double pressure, if not tripple pressure.
1. higher stock prices of the banks thus pushing the returns to go up too (profit/equity ratio)
2. very low lending rates thus low spread for banks
3. negative deposit rates that could not be reflected to real deposits (or the depositing clients will run out of bank balances).
Therefore banks need to think, need to optimize, need to lower the costs. Instead of providing more money to economy we can see lower investments than expected. We may blame Basel II and Basel III not allowing banks to loan SME projects, but investing in properties. And property prices grow and grow.
Than we have a central banks problem. Like the one in Hungary, where Central banks did setup some type of the "Save the children fund" for only purpose to print money to this fund and than pump them to political parties pockets and managements pockets.
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