In fact, recent research on the intra-euro area impact of structural reforms shows that the variance of the responses of national outputs to an interest rate tightening would be – at the peak and after the implementation of such reforms – roughly one-sixth of the level that it achieves in conditions of cross-country heterogeneity in terms of price and wage rigidity. 2 3.
But introducing a new instrument would be even better. Currently, discussions on how to translate the theoretical insights on concentration risks into a practical instrument are on-going. One option that is being looked into is a quantitative concentration limit, either absolute or relative. This limit would then be subject to supervisory reporting, disclosure or an additional capital buffer.