Moreover, some large financial institutions showed a massive concentration of risk, suggesting that risk management systems failed to identify the quantity of risk that financial institutions were accumulating. These same systems also failed to assess the systemic consequences arising from a global loss of confidence.
The second pillar should reinforce the incentive of national authorities to increase the resilience of their economies by strengthening their fiscal buffers in good times. So, the principle of fiscal policy counter-cyclicality should be promoted in the SGP reform. What is crucial is to safeguard (and even promote) economic recovery and restore fiscal sustainability in a sustainable way.