The second Finnish presidency takes place at a time when many say that Europe is in a crisis, due to the rejection of the constitutional treaty in two referenda. BIS Review 83/2006  1  Let us put things into perspective. Only two years ago ten new countries joined the EU.
We are attentive to financial vulnerabilities that could be exacerbated by the advent of additional adverse shocks. For instance, in countries where sovereign or corporate debt levels are high, higher interest rates could increase debt-servicing burdens and concerns about debt sustainability, which could be exacerbated by currency depreciation. An increase in risk premiums could kick off deleveraging dynamics as financial intermediaries de-risk.