The process will reduce their need for wholesale funding, but in any case access of the banks and the Sovereign to funding is now closely interlinked. Possibly the slowest part of the adjustment so far has been the resolution of the distressed residential mortgages.
On the assumption that financiers would aggressively pursue delinquent borrowers, the Central Bank’s initial priority here was to protect the consumer against unfair harassment and to give time for balance sheet repair and adjustment in the finances of the distressed households.