But this picture masks the heterogeneity within the euro area. Debt service-to-income ratios tend to be higher in stressed countries. Credit weakness appears to be contributing to economic weakness in these countries. Our analysis suggests that credit constraints are putting a brake on the recovery in stressed countries, which adds to the disinflationary pressures.
This crisis has triggered issues like the necessity to regulate  2  BIS Review 110/2007  rating agencies. The Basel Committee would have to review its approach towards the reliance on the external ratings of credit agencies.