According to a recent report from Moody’s, the coronavirus epidemic will have a negative impact on European banks, as it will slow down economic activity, especially in the first half of this year. According to Moody’s, a significant deterioration in the quality of bank loan portfolios is expected as the pandemic has significantly reduced the volume of global travel and industrial production, as well as reduced domestic demand in Europe. According to Moody’s, lending to small and medium-sized enterprises, especially in the manufacturing sector and in areas affected by sharp changes in consumer behaviour, will be at greater risk of default. A prolonged decline in the yield curve, coupled with higher credit risk spreads, more limited issuance of new bonds and stocks, and weaknesses in the stock market, will exacerbate pressure on the profitability of many European banks.