He must always be ready to meet his liabilities at all times. In case of a banker not able to honour his commitment, he will not only suffer a shock of such a failure, but the shock will also be transmitted to the rest of the economy very quickly. The systemic risks arising from that need to be eliminated or minimized.
These developments highlight important shortcomings not only at the level of national policymaking but also with respect to the institutional framework at the European level. The Stability and Growth Pact (SGP) was watered down in 2005 and has been ineffective in preventing the build-up of significant fiscal imbalances.