One cannot rule out an adverse scenario with feedback loops to the  real economy if banks deleverage to meet capital requirements imposed by regulators or markets. Hence, monitoring the interaction between debt sustainability in the public sector, the corporate sector, and the banking sector will be crucial.
Recognising the importance of ﬁscal support for ﬁnancial stability, the European Systemic Risk Board (ESRB) has established a regular monitoring framework. Since mid-2020, the 30 ESRB Member States have reported the size and uptake of ﬁscal policy support measures on a quarterly basis (ESRB 2020, 2021). The measures include loan moratoria, public loans and guarantees, direct grants, and tax deferrals, among others.