This followed years of increasing cross-border lending and borrowing and excessive risk-taking, mainly through bank-based financial intermediation. When panic led to an abrupt reversal of financial flows and fragmentation of the euro area banking system, the central bank had to take over the role of the interbank market in providing liquidity to banks in stressed countries.
But our supervisors are, of course, monitoring developments. In the process, we have identified three aspects which are important for making innovation a success. First: innovation presupposes openness to new ideas and developments. A not-inconsiderable share of change to date has taken place in peoples’ heads.