And in the euro area, a lender-of-last-resort role for the Eurosystem does not square with the institutional architecture. The monetary union differs from other currency areas in one crucial aspect: While monetary policy is a common undertaking, fiscal policy remains a national prerogative. Evidently, the unsound fiscal policies of one member state can have repercussions on the union as a whole.
2  BIS Review 134/2010  understanding that if financial imbalances were allowed to build-up, for example through a rise in asset prices and increase in leverage, the social and economic cost of its collapse would be substantial, and thus pre-emptive policy measures to cool such actions would be appropriate and necessary.