The ECB voiced its “grave concerns” at the time. Today, governments have no choice but to change their policies. And they must substantially reinforce the Stability and Growth Pact. And it is not only fiscal policies that need to be brought back onto the path of virtue. In several countries, macroeconomic policies more generally need to be aligned with best practice.
The ECB is playing its part here through its loan-level initiative, and various credit scoring initiatives by national authorities are helpful. But over the medium-term I am convinced we need to work towards a pan-European central credit database. This would facilitate multiple country SME ABS, which in turn would reduce both the risk and price of issuance.