A squeeze on lending to home buyers and businesses that followed the US subprime crisis has eased slightly in the last three months, the European Central Bank said on Friday.
But demand for lending has also fallen, and banks are wary of lending for household expenditure, the survey found.
The ECB's July survey of more than 100 eurozone banks found "somewhat lower net tightening of credit standards" for businesses and for home purchases than in the first quarter of the year, it said.
Demand for credit has also weakened meanwhile as a result of fewer corporate takeovers, slumping housing markets and falling consumer confidence, the ECB said.
But conditions had become somewhat tighter for consumer credit and other lending to households because banks expected economic conditions to deteriorate in the coming months, the ECB said.
Looking ahead, banks generally expected credit conditions to get tighter for both big and small businesses, but remain unchanged for households.
In terms of second-quarter demand, banks noted a drop by both businesses and households -- in the former case owing to fewer mergers and acquisitions, less corporate restructuring and a trend towards internal financing.
Households, meanwhile, were seeking fewer loans because housing markets were under pressure and also as a result of "deteriorating consumer confidence".
The net percentage of banks reporting stricter credit standards for businesses dipped to 43 percent in the second quarter from 49 percent in the first, while for loans to households for house purchases to figure eased to 30 percent from 33 percent.
As in previous surveys, commercial banks reported that lending to companies was more affected by financial market turmoil than lending to households.
In the third quarter of 2008, 45 percent of the banks expected to tighten credit standards for both large and small enterprises, while demand by businesses was expected to pick up a bit.
For households, net tightening of credit "is expected to remain broadly unchanged," and demand was forecast to decline further.
The ECB questions senior loan officers at 112 representative banks to get a feel for commercial lending conditions every four months.
It said that "banks reported that their access to money markets and debt securities markets was somewhat less hampered by the effects of the financial market turmoil in the second quarter of 2008 compared with the first quarter".
The ECB has been supplying money markets with significant amounts of cash to ensure a continued flow of credit on which business depends.
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