Bank lending to data center projects is drawing attention at the European Central Bank as officials weigh whether shifts in AI sentiment and asset values warrant a focused review of euro-area lending risks.
Possible on-site inspections could examine lenders’ cash-flow projections for data center projects, the values assigned to collateral and provisions made against potential defaults. On-site checks remain one option under discussion; the ECB has not settled the review’s scope or how it would assess wider AI-related risks.
The possibility has surfaced in discussions inside the ECB and in conversations with lenders overseen by the central bank. Financing in this area is expanding, while rising borrowing costs and resistance to new data center construction could weigh on the segment.
The contemplated exercise would be more limited than a past ECB review of leveraged finance. That examination, conducted several years ago, strained relations between supervisors and banks.
