(2013) who estimate that households respond to shocks very differently depending on  BIS central bankers’ speeches  1  their income and wealth: while the wealthiest households respond to government spending and tax policy shocks as predicted by standard real business cycle models, poorer households act in a non-Ricardian way, on account of e.g. the existence of credit constraints.
Steps include (1) the introduction of the modalities for undertaking Outright Monetary Transactions (OMTs) by the European Central Bank (ECB), which have created a safety valve in government bond markets, especially in peripheral countries such as Spain and Italy; and (2) an agreement to establish a single banking supervisory mechanism in Europe to ensure the stability of the European financial system.