The study looked at how the Sovereign Debt Crisis affected French banks and their corporate borrowers. They found that banks with more exposure to risky sovereign debt reduced lending more than banks with less exposure. Firms borrowing from these more exposed banks received fewer short-term loans and faced higher funding costs. Younger and smaller firms were hit harder by these credit restrictions. This shows how the Sovereign Debt Crisis spread from peripheral to core countries in the Euro Area through the banking system.