Furthermore, in scenarios in which banks are substantially exposed to sovereign default risk, it may be necessary to condition access to eurosystem liquidity to compliance with specified fiscal plans, which inevitably puts central bankers in the political spotlight. In the absence of monetary union, the unfolding of the crisis would have been quite different.
Since the scale of the pre-crisis credit expansion in the euro periphery would only have been possible by taking on large-scale foreign-currency liabilities, a national central bank would have been limited in its capacity to provide substantial foreign-currency liquidity. In the event of a large-scale flight of bank depositors and bank creditors, the imposition of capital controls and/or liability restructuring would have been necessary.