This would strengthen institutions’ ability to weather 5  BIS Review 76/2000  deteriorating economic conditions, when access to external financing becomes more costly and constrained. Moreover, by leaning against the wind, it could reduce the amplitude of the financial cycle, thereby limiting the risk of financial distress in the first place. The reasoning is very familiar to macro-economists.
But it also takes the European Parliament and they are heading in the right direction, identifying a taxonomy, without which it would be difficult for others to move and say; here we need to take a provision. That collateral is not really worth what’s on the face of it. Is this one issue you think Europe can speak with a common voice on?