Beginning from the spring of 2010, cascading problems within the euro area weighed on global economic activity and heightened uncertainties. Consequently, output in the developed economies is only 4 percent above the pre-crisis peak, and average growth since 2007 is a paltry 0.8 percent. What went wrong? What can central banks do to prevent the development of another disruptive bubble?
The developments in the banking sector soundness index also revealed an improvement in the general stability and soundness of the banking sector reflecting improved capital buffers, upgrade in asset quality, and enhanced liquidity stance. Also,  results  from  the  Loan  Migration  and  Contraction Models stress testing also suggest that the banking system was generally resilient to credit risks.