Most banks currently meet this ratio. For standard assets, in alignment with the Basel proposals for forward looking provisioning, more work needs to be done based on sectoral trends and measurements of estimated loss based on something like the Spanish dynamic provisioning model.
5 There was an exemption clause for the deficit limits in the event of a severe recession. 6 European Fiscal Board (2019), Assessment of EU fiscal rules with a focus on the six and two-pack legislation, 11  September. 7 Kiley, M. and Roberts, J. (2017), “Monetary Policy in a Low Interest Rate World”, Brookings Papers on Economic  Activity.