These challenges do not imply that technical work on measuring and monitoring systemic risk should not go forward; only that the task ahead is as large and time consuming as it is critical. There is, therefore, a need that the momentum set in motion in the wake of the crisis be maintained.
As investors became aware of the real state of Greek public finances and of the systematic falsification of statistics, investors woke up to the risk attached to the sovereign bonds of not just Greece but also other vulnerable euro area countries. Papandreou’s announcement caused a shock in the financial markets and stupefied political decision makers.