Overall, the effects of the regional crises on the real economy are weaker, too, in Europe, and the financial system is, on the whole, more stable. That is probably due to the difference in financing arrangements. In the United States, for example, financing is mainly taken up through the market. By contrast, in Europe there is much more direct financing through individual (house) banks.
Another factor is that credit risks can be intercepted better in the continental universal banking system. Given the slight fluctuations in property prices, slumps in credit resulting from dwindling collateral are also unlikely here. IV The keyword ‘contagion’ undoubtedly belongs on the agenda, too.