The recent announcement of the Outright Monetary Transactions (OMTs) can be taken as an example of how to address tail risks, with possible severe consequences for price stability over the medium term and how to bring confidence back to the euro area financial markets. The confidence effect of the OMT announcement has been significant, and rightly so.
The financial system should be shifted BIS Review 72/2000  2  from one led by banks to one led by the capital market. And, on the corporate management front, corporate governance should put more emphasis on shareholders. Needless to say, employment adjustment should be more drastic.