What originated as a bubble in the US housing sector soon snowballed into a crisis and radiated in two different ways – first, in a geographical sense, from the US to other advanced economies and then to the rest of the world; and second, in a sectoral sense, from housing to all productive sectors.
One indicator of this is that the volume of Additional Tier 1 bonds and Tier 2 instruments issued by euro area banks and held by investors in the euro area increased by two-thirds between 2013 and 2017.