The yield spreads between the euro-area’s sovereign securities increased rapidly. For some countries, including Italy, they rose far above the level justified by the economic fundamentals. The spread between ten-year BTPs and German Bunds, still less than 200 basis points in the first half of 2011, reached 550 basis points at the end of that year.
The maintenance of financial stability in an environment of global capital markets, therefore, calls for greater attention by governments to the soundness of public policy. Governments are beginning to recognize that the release of timely and accurate economic and financial data is a critical element to the maintenance of financial stability.