But most would agree that the negative impact of the crisis has been stronger for the euro area than for other jurisdictions. The reason for this is that certain features of the euro area have made working through a debt crisis harder and more protracted, namely institutional and structural weaknesses at both national and euro area levels.
The absence of an integrated euro area banking system is one such weakness. The Great Moderation – and a euro-specific misrepresentation of the type of risk that investors were exposed to when accepting to finance imbalances in other members of the monetary union – had encouraged a formidable expansion in cross-border banking activities prior to the crisis.