Consequently, we have to ensure that such systemically important financial institutions (or SIFIs) can fail without destabilising the whole financial system. What we need are insolvency frameworks that are in tune with the interconnectedness and complexity of the financial sector. Major steps have already been taken in this regard at the international level.
It is certainly not the Eurosystem’s intention to harm capital markets: quite the contrary. Nevertheless, it needs to be recognised that investors probably will most likely not flood in again immediately. But as a wise person once said: it is very difficult to predict – especially the future.