Although market-based debt financing has gained importance since the global financial crisis, bank credit remains by far the dominant source of external finance for euro area firms (Slide 12, left-hand chart).8 The financing structure, in turn, has important implications for how strongly a given monetary impulse is transmitted to the real economy.
It’s not surprising that there are different views, as there is so much uncertainty. At this point it’s a discussion about risk management and how to hedge against risk. These are measures, if the scenario of the Commission, the ECB and the ESM is the right one, that Greece will never have to implement.