We were on the brink of a global financial meltdown. The ensuing “Great Recession” hit the euro area hard due to its high economic openness and financial exposures to a bank financed system.1 It triggered the euro area’s sovereign debt crisis, for which several distinct root causes were to blame.
As Tony Judt put it, we saw: “Uncertainty elevated to paroxysms of collective fear – which had corroded the confidence and institutions of liberalism.” Today I have two messages. The first is that banks mirror their environment, but also contribute to shaping it in many respects.