With many investors trying to do the same thing at the same time, the downward pressure on prices intensified, resulting in extensive losses, even higher margin requirements and further forced sales until the market for funding and for mortgage-backed securities largely dried up.
As a consequence, unemployment in some countries, in particular among young people, remains unacceptably high, despite the progress made at the euro area level on average. True, many other advanced economies are facing similar challenges. But the combination of weak potential growth and high debt is toxic in a monetary union with decentralised fiscal policy and insufficiently integrated financial markets.