All these exacerbate the downturn. Leverage is an amplifier in as much as it amplifies the profits during upturn and exacerbates losses during the downturn: higher the leverage, more severe is the downturn. This amplification is also called procyclicality. Prior to the crisis, the regulatory policies did not effectively address the systemic risks arising out of procyclicality and interconnectedness.
Benoît Cœuré: Interview in EBRA newspaper group Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, in EBRA newspaper group, (L’Alsace, Les Dernières Nouvelles d’Alsace, Le Républicain Lorrain, L’Est Républicain, Vosges Matin, Le Bien Public, Le Journal de Saôneet-Loire, Le Progrès, Le Dauphiné Libéré and Vaucluse Matin), conducted by Mr Francis Brochet and published on 11 September 2015.