Thread by @fwred

A few charts from the @ecb Financial Stability Review.

1. Total net funding of euro area households, firms and sovereigns, including various EU support schemes
ecb.europa.eu/pub/pdf/fsr/ec…

2. Bank loans to euro area corporates: more than 7% are affected by state guarantees, and 14% by moratoria.

3. Banks' Net Interest Income contracting due to margin compression. Overall profitability markedly lower due to loan loss provisioning too (though lower than predicted).

4. Public debt increase broken down between GDP drop and pure debt hike.

5. Public debt (bis): it's about the interest burden and flows more than the stock, and the EU package will help in NPV terms.

6. Public debt (ter): it's about contingent liabilities, too. Another reason to do whatever it takes to support the recovery.

7. Corporates and SMEs: one of the @ecb's key messages is to avoid a premature withdrawal of loan guarantee schemes which could cause banks to tighten credit standards further and result in a credit crunch.

8. Corporates and SMEs: composite vulnerability indicator, insolvencies and GDP collapse. An extraordinary chart as pointed out by @jeuasommenulle.

9. Sovereign bond markets: the ECB was here to c̶l̶o̶s̶e̶ ̶t̶h̶e̶ ̶s̶p̶r̶e̶a̶d̶ eliminate fragmentation. Mission accomplished.

10. Section 3 on the banking sector. NII down on higher cash holdings, lower rates, state guarantees. Profitability unlikely to recover fully before 2022. Higher credit risk. Stronger sovereign-bank nexus. Apart from that, all fine.