“Firm default probabilities revisited”. Banco de  Portugal, April 2016.  www.bportugal.pt 6  these datasets), there have been several efforts to identify what drives household defaults. These lines of research allow the identification of emerging risks in banks’ portfolios, as well to create modelling tools for the forecasting of default probabilities. The latter are a key input in stress-testing exercises.
And “to adjust in real terms” is a very technical description of what is usually a very painful process involving lower nominal wage growth or even nominal wage cuts. Another implication of the euro area’s single monetary policy is that the key interest rates are set for the currency bloc as a whole.