The December 2011 IIF EM Bank Lending Conditions (EMLC) survey showed a significant deterioration in the economic outlook, with global banking conditions weakening substantially over the past 3 months in all major regions. Most importantly, international funding conditions have tightened appreciably further across all regions. The rapid deleveraging of European banks has continued to adversely affect Emerging Europe. All indices for Emerging Europe, especially the credit standards index, declined to worrying levels. The brightest aspect of the downbeat survey is that the demand for credit in emerging economies is generally holding up quite well (with the exception of Emerging Europe).