The growing role of secured lending in financial markets means that financial intermediation would suffer enormously from any paralysis in sovereign bond transactions. Second, sharply lower bond prices can cause significant losses in the portfolios of financial and non-financial institutions. 2  Forecasts were based on different vintages of Eurozone barometer forecast results.
3  See ECB Bank Lending Surveys for October 2011 and January 2012, http://www.ecb.int/stats/money/surveys/ lend/html/index.en.html  BIS central bankers’ speeches  5  For banks, this would reduce their ability to provide loans to the economy.