Abstract

The global financial crisis triggered the deleveraging of the financial sector. Capitalisation of the euro area banks has increased. At the same time the total assets of the banking sector declined by 17 per cent from 2008 to 2015 and the share of loans in total assets has decreased from 70 per cent to 64 per cent (ECB 2016). Have these substantial changes in the financial sector had an impact on company finances? This chapter has a deeper look at the capital structure of European firms before and after the crisis comparing the evolutions in both East and West.