Thanks to the preparations made by public authorities and the private sector, a no-deal scenario poses manageable risks to overall euro area financial stability. However, some vulnerabilities remain which could generate more adverse effects if they interact with risks currently affecting the euro area outlook.
The synchronisation of a severe economic and financial downturn, after the failures of major financial institutions in 2008, is a stark reminder of the significant interdependence of our economies. In 2009, 40 out of the 50 largest economies in the world experienced severe recessions. Second, we need a new approach to international cooperation because the potential sources of shocks have multiplied.