Even if correctly diagnosed, making that supervisory case to bank management can be difficult because, regrettably, incentives for loan officers and managers traditionally have rewarded loan growth, market share, and the profits that derive from booking interest income with, in retrospect, inadequate provisions for possible default.
But it could also result in risk building up outside regulated markets if it were used to disintermediate financial institutions. Moreover, the emergence of different DLT specifications could lead to fragmentation within the euro area payments system​.