in terms of increasing spreads, lower credit volumes and a more moderate GDP growth). However, in the long run, the net positive benefits are expected to dominate as a result of lower probability of crises to occur.
3  In the euro area, the expansion of banks’ balance sheets has been around 400% between 1992 and 2007 (just before the crisis) whereas nominal GDP has increased only 130%. As a result, the ratio of banking sector total assets to GDP, a measure of the depth of bank intermediation, increased from 145% in 1992 to 331% in 2007.