4 / 16  BIS central bankers' speeches  Slide 4  Adjustment and resilience The increased robustness of the euro area economy is also reflected in the gradual unwinding of the macroeconomic imbalances accumulated before the crisis. In fact, countries that eventually entered a programme had recorded large losses in price competitiveness in the run-up to the crisis.
For an individual country, the issuance of domestic debt aimed at  6  BIS Review 128/2009  absorbing excess liquidity from abroad carries a fiscal cost if the domestic interest rate is higher than the return on official reserve assets; furthermore, and perhaps more importantly, the country risks large capital losses if, sooner or later, its currency is revalued.