Sovereign Debt Crisis Raises Bank Lending Rates, Hurting Borrowers in Euro Area.
The sovereign debt crisis in some euro-area countries since 2010 has raised the cost of loans for businesses and households. A study found that this crisis significantly increased bank lending rates in peripheral countries. If the spreads had stayed constant, interest rates on loans would have been lower by 130 and 60 basis points for businesses and households, respectively, by the end of 2011.