The design of the institutional framework proved porous in particular in four places: •  First, the binding effect of the Stability and Growth Pact was insufficient to establish appropriate incentives for prudent fiscal policies and to contain national developments which can cause damage to the union as a whole.
As I believe was also  BIS central bankers’ speeches  1  illustrated by Atish Ghosh this morning, this change of focus has most likely contributed to the greater effectiveness of new early warning tools. 1 Recent research shows how the predictive information can be improved by using individual balance sheet data of financial firms combined with traditional macro-financial variables.