Note that this figure double counts amounts outstanding between reporting banks. BIS central bankers’ speeches  3  is itself interdependent with other global markets, and specifically with derivatives markets in other currencies. The regulatory agencies in Australia have indicated that they view the Australian dollar IR swap market as being systemically important to the domestic financial system.
The proposals on the table aim to strengthen existing constraints and procedures via monitoring mechanisms and more or less automatic sanctions. If the objective is to ensure healthy and robust public finances in the euro area, it cannot be achieved only through monitoring procedures and under pressure from the financial markets. In my opinion, we have to turn the problem on its head.