Eurozone banks have tightened lending standards to the private sector since the beginning of 2022. According to the ECB's Bank Lending Survey, in the first quarter of 2023 the degree of lending tightening to corporates was the most intense since the eurozone debt crisis. There is now concern that recent banking sector turmoil will exacerbate this trend and that reduced credit availability will lead to an increase in corporate insolvencies.1
Data on corporate bankruptcies in the main eurozone economies highlight the link with credit availability (see Chart 1).2 From 2003-2019, the change in lending standards to firms preceded the turning points in the twelve-month change in corporate bankruptcies by between two and four quarters. This relationship was temporarily interrupted in the post-Covid period when bankruptcy proceedings were effectively suspended, but has since re-established itself, at least in directional terms, since the beginning of 2022.