Investigations so far have also revealed that some of the assets were not registered in the names of the specific financial institutions but in the names of related or connected parties, making it difficult to dispose of the underlying collateral to offset the outstanding loans. Some of these loans were even fictitiously created and the directors are being pursued to recover such monies.
Countries undergoing fiscal adjustments are increasingly penalised by financial markets because of their additional burden of supporting domestic banks. Against this background, the need to break the loop between banks and sovereigns at the national level, by taking responsibility for financial stability to the European level, becomes  2  BIS central bankers’ speeches  evident.