The economic framework they had in mind, known as the optimum currency area theory, predicts that the creation of a common monetary area becomes more costly the more the participating countries experience idiosyncratic shocks, in terms of size, nature and frequency, and the more varied their responses to such shocks are.
The second aspect of the reforms is couched in terms of medium to long term objectives. Under this, financial sector stability is emphasized alongside the need to position the banks to provide funding for the development of the real sector of the economy.