The danger that sovereign spreads would spiral away, undermining monetary transmission as well as a lot of other things, seemed real, especially as the funding firewall that was quickly agreed at political level would take several months to become a reality. ECB intervention in secondary debt markets looked like a sensible and urgent action needed to nip things in the bud.
Additionally, a generalised entry into force of the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR), irrespective of the banks’ business models, has meant that, as of today, many institutions would only be deemed resolvable if bail-in would be extended to the level of senior debt or even deposits.