1 Hence, the second anchor of a monetary union is governments that are committed to maintaining solid public finances. The institutional framework governing EMU reflects these insights. On the central bank side, the maintenance of price stability over the medium-term is the most important contribution that monetary policy can make to sustainable growth, employment, and social cohesion.
For example, increased cross-border interbank funding was not accompanied by a sufficient diversification on the asset side. As a result, in some jurisdictions banks quickly accumulated significant exposures to local assets (such as real estate), and when the crisis  BIS central bankers’ speeches  3  hit, cross-border funding was quickly withdrawn and sizeable losses had to be absorbed within national borders.