Metaphorically speaking, the traditional minimum requirements guarantee that there is exactly one taxi at the taxi rank. However, this capital cannot be used to absorb losses, as hard-hitting supervisory sanctions would be imposed if capital falls below requirements. The new rules ensure that there are at least two taxis waiting.
Finally, contingent liabilities related to the financial rescue measures are expected to be about 8% of GDP, excluding government guarantees on retail deposits. These figures, however, do not reflect the very different developments taking place across euro area countries. Between end-September and end-October 2008, concurrent to the announcement of the broad-based bank rescue packages, an adverse shift in market sentiment towards sovereign borrowers occurred.