Although it is evident that sovereign rating is important for domestic banks, the impact of sovereign rating news on financial company shares has not yet been studied. This paper fills this gap by examining the spillover effect of Euro-zone sovereign rating changes announced by Standard and...

The recent financial crisis has been followed in Europe by a significant decrease in credit flows to non-financial enterprises. This paper investigates demand and supply of loans using data from surveys and company balance sheets. Our econometric analysis suggests that recent ECB policy has...