4  BIS central bankers’ speeches  An aside aspect shown by the chart is that public debt was not taken predominantly by the domestic banking sectors until 2009 as the domestic share declined until then, indicating the progress of financial integration across member States during many years.
To understand what happened in the run up to the crisis it should be highlighted that until 2007 the evolution of public debt in the countries now under stress was financed mostly by external investors and not by resident financial institutions.