The spread between 10-year Greek and German bonds was less than 30 basis points in 2007. It widened to about 150 at the end of 2008 in the aftermath of the Lehman Brothers collapse and then fluctuated between 100 and 250 basis points until the beginning of this year.
Recent cases highlighted what I would call an ‘accountability conundrum’. Banks nowadays are mostly ‘European in life but remain national in death’. This means that, while supervisory and resolution decisions are mostly taken at European level, the ensuing consequences still lie with taxpayers at national level, with potential serious impacts on national budgets.