Selling or reducing stakes in banks too early could reduce investors’ and depositors’ faith in those banks. Getting out too late would cause a prolonged period of market disruption as institutions (partially) owned by governments are at a competitive advantage over privately owned banks. Prolonged government intervention hampers the healthy effects of competition. Normalization of the markets is far more difficult under those circumstances.
1  From now on, this report will contain the indicators that previously appeared in the ECB report on “Indicators of financial integration in the euro area”. The most recent edition of that report was released in September 2006. The indicators will continue to be updated bi-annually on the ECB’s website.