So how can we do things better in future? Structural reforms are nothing new in Europe’s policy debate. They have been discussed since the 1970s, when European growth and employment started to fall behind that of the United States.
And, if well devised, it would inject an additional element of market discipline into large financial firms, because the price of those instruments would reflect market perceptions of the stability of the firm. The financial crisis also highlighted weaknesses in liquidity risk management at major financial institutions, including an overreliance on short-term funding.