Also Europe had to learn the hard way that loose policies and large imbalances also in the private sector, rather than only the public sector, may have severe implications for public sector budgets and risk systemic crises. Especially in the banking sector, our regulatory framework and surveillance turned out to be insufficient.
While finance was getting increasingly regional or global, regulation remained mainly in the national realm, and discipline was delegated too much to the markets itself. But in less than two years, the institutional structure of the EU and the euro area has changed significantly to take some of these lessons into account.