But nowhere has drawing the line between the monetary domain and the fiscal domain been as difficult as in the euro area. The ECB is the central bank, not for a single sovereign state,  BIS central bankers’ speeches  3  but for 17 sovereign states.
The EU has strictly limited risk sharing arrangements between member states and none between the national banking systems. Now, in the crisis, the divergence of the euro area economies has dramatically increased and the ECB could easily end up becoming such a risk sharing mechanism. The ECB or the Eurosystem cannot become a mechanism for sharing fiscal risks between the member states.