Systemic importance, the “too big to fail” issue, and information asymmetries are just a few of the special features that distinguish the financial sector from non-financial business areas. The financial crisis laid bare that banking regulation – or metaphorically speaking: the fire protection – had been insufficient.
Again leaving aside the most recent countries to join the euro area, Greece, Portugal and Ireland, in particular, have lost competitiveness vis-à-vis their main trading partners in the euro area. Germany, in contrast, has been able to lower relative unit labour costs. There have been similar persistent losses and gains in competitiveness in the United States.