It is interesting that, over the past year, as the share market has fallen, the household saving rate has increased substantially and more older workers are either remaining in, or returning to, the workforce. BIS Review 39/2009  3  Even after the large fall in wealth over the past year, the household sector is still in a relatively sound position.
Only Italian, Greek and Slovakian banks are even more home-biased. However, it is the high level of undiversified sovereign exposures which makes sovereign default a potentially systemic event. 5  The role of monetary policy  Consistently applying the stiffened rules and putting an end to the preferential treatment afforded to sovereign debt will be instrumental in strengthening the stability of our monetary union.