The use of stability facilities to provide loans for banking sector recapitalisation reflects the recognition that crisis management for sovereigns and for financial institutions is increasingly intertwined. Perhaps over time this will provide the foundation for a more integrated European system of public and financial sector crisis management.
It was that usable foreign exchange should exceed scheduled amortizations of foreign currency debts (assuming no roll overs during the following year). The Calvo rule is similar, that is, governments’ external debt repayments falling due in the next 12 months should not exceed its foreign exchange reserves.