Inasmuch as any country that did not adequately operate sustainable macro and financial policies would suffer greatly from the denouement of policy deficiencies, the euro embodied a strong commitment device. The costs of that policy failure are being felt now. But the answer is not to fall back on the more autarchic policies of the 1960s and 1970s, but to try again, try better.
We then place each bank in one of these categories and can thus compare it to its European peers. Like all supervisors, we ask one very general question: can a bank generate sufficient returns within a framework of suitable risk appetite and on the basis of a clear and sustainable funding structure?