In particular, it may have appeared inconceivable that any euro area sovereign issuer could actually reach its “fiscal limit” – that is, a situation where it could not re-finance its debt. Moreover, the “great moderation” experience led to low levels of investors’ risk aversion and low price of risk across asset classes.
In recent years, the Eurosystem has been working on a new consolidated TARGET platform – a complex infrastructure that would offer the market enhanced and modernised services – in addition to developing a Eurosystem Collateral Management System that will simplify processes involving multiple jurisdictions, including the mobilisation of cross-border collateral.