An unprecedented 2020 and what to watch for 2021 The last two banking crises were about credit. Today it matters less what you''ve borrowed, more what you''ve saved. Households will exit this crisis wealthier and more cash-rich than they went in. Corporates borrowed a record amount, and yet reduced their net debt. EUR1trn has been accumulated (helicoptered?) into deposit accounts. How this cash is used in 2021 has meaningful implications for bank top-lines and the strength of the economic recovery. Fresh data from the ECB on Friday allows an up-to-date look at what''s going on. Corporates have started to deleverage Corporates are using un-needed cash to deleverage across most of Europe. Demand lead indicators suggest this trend will intensify. We show why, for now, it should not be feared (by markets, economists or central banks), but why it augurs a shrinking industry top-line this year. TLTRO may need a re-think Banks are currently ''pushing on a string'' in the corporate sector. As such, the current design of TLTRO needs a re-think. If not, EUR1.5trn of bank funding may quietly re-price higher overnight in June: not good for banks, borrowers or policy-makers. We explore the different ''accrual'' practices across the sector - dividing banks into 3 groups based on their NII risks from TLTRO pricing. Excess liquidity rising Our excess liquidity indicator hits record growth in December. It''s an additional NII headwind to monitor. What can be done? More generous tiering from the ECB, more aggressive deposit pricing or less wholesale funding issuance from the banks are themes to monitor. Investment implications Eurozone NII looks the most challenging PandL dynamic in the industry. We stick to a preference for banks which would enjoy reflation, but don''t need it, are underweight Eurozone NII and would enjoy falling credit risk concerns: BBVA, Credit Agricole, Intesa, Credit Suisse and Lloyds.