Euro area banks tightened credit standards for loans to firms and consumer credit in the third quarter of 2026, according to the ECB's October 2026 bank lending survey of 159 banks. A net 9% of banks reported tighter standards for corporate loans, exceeding the 5% they had expected in the previous round. A net 14% tightened standards for consumer credit. Standards for housing loans were unchanged. Higher risk perceptions and reduced risk tolerance were the main drivers, with some banks citing geopolitical uncertainty and energy developments. Demand fell across all segments. Corporate loan demand posted a net decline of 6%, reversing a small increase in the second quarter. Housing loan demand fell sharply, with a net 27% of banks reporting a decrease, driven mainly by higher interest rates. Consumer credit demand edged down by a net 2%. Banks expect further tightening and weaker demand in the fourth quarter. On artificial intelligence, several banks said they expect a gradual but sustai