Loan markets get that shrinking feeling

A Greek exit from the euro could take bank deleveraging to new heights, hurting corporates and dragging the eurozone deeper into recession, bankers tell Financial News

Last month, Goldman Sachs analysts published research directly linking cuts in bank lending to a decline in GDP across the eurozone. Goldman Sachs itself only lent $3.7bn in corporate syndicated loans in the eurozone last year compared with $27bn in 2007.

The analysts predict that a stagnation of loans could drag the combined eurozone GDP down by about 0.5% this year and next.

WSJ Logo