Bond spreads for several euro area countries widened beyond any reasonable level. Liquidity in government bond markets of some euro area countries almost dried up. And the tensions in the sovereign bond markets spilled over to other market segments, such as the foreign exchange market and equity markets, where trading volumes and liquidity became erratic, and volatility spiked.
Despite the introduction of a single currency and cooperation among the stock exchanges, the financial markets in the euro area continue to be segmented to a larger extent than those in the United States. In particular, issuing on the bond market is heavily fragmented; in the euro area, there is no issuer comparable to the US Treasury.