The European Central Bank says the amount lent to businesses by banks leveled off in January after a steep plunge in December highlighting concerns that companies are still finding it hard to find credit as the eurozone debt crisis puts pressure on banks. The monthly loan data Monday were a first look at the effects on the European economy of the ECB’s 489 billion ($657 billion) in emergency, 3-year loans late December to banks hit by the government debt crisis. The ECB is trying to keep banks from cutting back on loans to businesses and consumers and thereby starving the real economy of the credit businesses need to expand and create jobs. The economy of the 17 countries that use the euro shrank by 0.3 per cent in the last three months of 2011, putting it on the verge of an official recession, defined as two straight quarters of falling output. Loans to nonfinancial businesses fell by 1 billion in January, but stabilized after a steep drop of 35 billion in December. Analysts are saying the ECB loan infusion dubbed a longer-term refinancing operation or LTRO appears to have helped steady the situation but concerns about tight credit remain. The ECB will offer more cheap loans to banks on Wednesday. Analyst Carsten Brzeski at ING in Brussels said that while the first ECB loan offer helped financial market sentiment, “the economic impact however remains still limited. As a consequence, this week’s second 3-year LTRO is clearly not redundant.” The ECB loan offering in December has been credited with removing fears of an unexpected bank failure and relieving financial pressure on over-indebted governments such as Italy. Some of Europe’s banks also found it impossible to borrow money normally because of fears they might suffer losses on bonds issued by shaky governments. Before the offering, heavily indebted European governments such as Spain and Italy were foundering as massive sell-offs of their government bonds sent the interest rates they have to pay on their debt soaring over 7 per cent making it economically suicidal for them to continue to borrow on open markets. Shakier banks used the money from the LTRO to pay off their own maturing bonds, while some banks appear to have used the money to buy bonds issued by their own governments. That has eased access to credit for governments and lowered high borrowing costs that threatened them with financial ruin. Analysts indicated there could be a lag between the ECB loans and any increase in credit to the private sector. “The ECB will certainly be hoping that over the coming months banks use an increasing amount of the money borrowed in December’s three-year unlimited tender and the second three-year tender due on Wednesday to lend to businesses and households,” Howard Archer at IHS Global Insight wrote in a research note. He cautioned that “despite January’s lending data, there is still little evidence of a significant early boost in bank lending to the private sector.” The monthly loan data Monday were a first look at the effects on the European economy of the ECB’s 489 billion ($657 billion) in emergency, 3-year loans late December to banks hit by the government debt crisis. The ECB is trying to keep banks from cutting back on loans to businesses and consumers and thereby starving the real economy of the credit businesses need to expand and create jobs.