A virtuous circle between sovereigns, banks and corporates At the onset of the pandemic, the strict lockdown measures hit large parts of the corporate sector hard, raising its vulnerability to levels last seen during the global financial crisis (Chart 1). Many firms saw their revenues collapse and were facing acute liquidity shortages that threatened to turn into solvency problems.
Chart 1 Composite indicator of corporate vulnerabilities and underlying driving factors in the euro area Z-scores  https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210128~8f5dc86601.en.html  1/13  29/01/2021  The sovereign-bank-corporate nexus – virtuous or vicious? Sources: Eurostat and ECB calculations.