It is also vital to break the feedback loop between bank and sovereign credit which lies at the very heart of the current crisis.11 I therefore believe that the Financial Compact should include a harmonised regime for bank resolution and, further ahead, a single European agency responsible for deposit insurance and for winding down failed banks.
As we face the challenges and uncertainties from this continuing pandemic, the BSP reiterates its commitment to use its entire arsenal of policy tools and instruments in a timely and prudent manner to help cushion the economy from the potential fallout.