Indeed, in the euro area, we have seen a strengthening of the link between banks and sovereigns over the course of the crisis through an increase in banks’ holdings of domestic sovereign debt relative to foreign public debt (see Figure 2). This may impede banks’ ability to provide credit to the real economy during times of stress in sovereign bond markets. 2.2.
High unemployment  A second legacy of the financial crisis is a large increase in unemployment in many economies. While unemployment can rise rapidly, as illustrated by the current episode, it tends to decline slowly and will be a feature of the economic landscape in some countries for many years.