Even before the recent financial crisis and recession, however, the enforcement mechanisms for these rules did not prevent these targets from being breached, and fiscal problems in several euro-area countries have recently been a source of financial and economic stress. European leaders are working to strengthen their tools for enforcing fiscal discipline.
Nevertheless, just as has happened in the larger fixed income markets offshore, banks operating in Australian bond markets have changed their business models. This has seen a lower level or greater rationing of principal-based marketmaking as a result of a decrease in appetite to warehouse risk, particularly bonds that are not very liquid.