This innovative approach could help resolve the asymmetry between the many different national fiscal policies and the single monetary policy, although this would require amending the Treaties, which is a long process with uncertain results.
And, of course, lower employment and incomes further depress asset prices and borrowers’ ability to repay loans, with further adverse effects on financial institutions and their ability to extend credit. 2  BIS central bankers’ speeches  At this point, some financial institutions may have become nearly insolvent.