All in all, most market-based indicators suggest that the current outlook for the euro area non-financial corporate credit  BIS Review 148/2007  5  quality, while deteriorating somewhat, still remains overall fairly solid.
Default rates have remained low, but they started to rise in the second half of 2006 for the first time since 2003 and are expected to rise further in the period ahead. The balance between credit rating upgrades and downgrades of non-financial corporations remained at a level close to that observed over the previous years.