While the ECB’s policy response has, to a signifi cant extent, sheltered the non-fi nancial private sector from the sovereign debt crisis, and has avoided major disruptions in the fi nancing of the economy, the fi nancing environment of both banks and the non-fi nancial private sector of countries affected by the sovereign debt crisis remains challenging. This is particularly refl ected in persistent cross-country heterogeneity as well as in the strong link between sovereign market tensions, the funding and balance sheet conditions of banks, and the fi nancing of non-fi .
