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ECB says bank loans to businesses falls in April, another sign of continuing economic weakness

FRANKFURT – The European Central Bank says that lending by banks to companies fell in April, further evidence of a slack eurozone economy.

The ECB said Thursday that loans to non-financial corporations across the 17 European Union countries that use the euro decreased by 1.9 per cent from a year ago, even worse than the 1.3 per cent fall recorded in the previous month.

The figures reflect the weak eurozone economy, which shrank a further 0.2 per cent in the first quarter.

The central bank says it is looking for ways to unclog bank lending to small and medium size companies. Early this month, it cut its benchmark rate to a record low of 0.5 per cent. However, it says low rates are not being passed on by banks to companies.