In contrast to what happened in other countries, in Greece it was the sovereign crisis that led to a banking crisis, not the other way around. How did that happen? First, in terms of liquidity. A series of sovereign downgrades, and then bank downgrades, forced the banks out of the global financial markets. Uncertainty led to large deposit outflows.
Managing capital flows should not be treated as an exclusive problem of EMEs. In as much as lumpy and volatile flows are a spillover from policy choices of advanced economies, the burden of adjustment has to be shared. How this burden has to be measured and shared raises both intellectual and practical policy challenges.