Whereas this lower flexibility might be a disadvantage to benefit from positive supply side shocks like technical innovations, during the time of a crisis this European “sluggishness” offered some protection against an overshooting of negative expectations leading to a deflationary spiral. –  Second, there are also profound differences in their financial structures.
Financial institutions were able to enjoy a wider range of profit opportunities, through household lending and through transactions in credit derivatives with household loans as the underlying assets. The total outstanding volume of credit derivatives worldwide is estimated to have swollen more than 110 times from 180 billion US dollars in 1997 to 20 trillion US dollars in 2006.