IGTA Journal - Winter 2020/2021

29/01/2021 The sovereign-bank-corporate nexus – virtuous or vicious? https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210128~8f5dc86601.en.html 7/13 Chart 6 Euro area bank exposures to domestic sovereign debt securities relative to total assets Jan. 2007-Sep. 2020, observed; end-2022, potential; percentage of total assets Sources: ECB (BSI and GFS statistics, and macroeconomic projections). Notes: The dots are based on a simple projection of potential increase based on the average share of domestic sovereign debt securities held by euro area banks from March to September 2020 and public debt projected from 2020 to 2022. In fact, bank and sovereign credit ratings remain highly correlated in the euro area ( Chart 7 ). [8] Chart 7 Issuer ratings of sovereigns and banks in the euro area Rating buckets IGTA eJournal | Winter 2020/21 | 12