The fall in home value would still leave the household underwater, but the mortgage value would have fallen by only $ not $ The bank’s assets would have fallen by at most $ billion. It would not have risked insolvency. The second relevant variable is bank asset concentration. In my example, the bank had half of its assets directly tied to U.S. residential land.
A draft report  presented to the Committee on Economic and Monetary Affairs of the European Parliaments  (ECON) 7 makes the entry into force of the insurance phase of EDIS conditional on reducing risks in the banking sector.