Another example of where self-regulation might not be the best solution is the question of the migration end-date. Although we have successfully started out on our journey to SEPA, we have not yet determined our date of arrival. The Eurosystem has emphasised that an ambitious and yet realistic end-date for migration to SCT and SDD is necessary.
During the pandemic, insolvencies in the corporate sector actually decreased despite a sharp decline in GDP (chart 11) – thanks to extensive government measures. Credit risk was at a commensurately low level. The time series on which banks are basing their estimated future credit risks could therefore paint an excessively optimistic picture of the future.