That said, CDS spreads are likely to remain high for some time to come. Following a series of defaults or near defaults of several global financial institutions after September 2008, the systemic risk indicator decreased substantially, as central banks took coordinated actions, guarantee schemes were approved and some euro area LCBGs were recapitalised.
Nevertheless, the indicator has remained above the levels of summer of 2008, which suggests that market participants continued to assign a relatively high probability to systemic defaults by both euro area and global LCBGs.