One side of this institutional gap is now being addressed through the establishment of firewalls such as the European Financial Stability Facility (EFSF) – and the forthcoming European Stability Mechanism (ESM) – with their framework for sovereign crisis management and resolution. Some further steps are still needed. For example, there are only national arrangements for interventions to resolve crises of big pan-European banks.
This political tit-for-tat between the populist government of Italy and Brussels may escalate into a genuine 3/5  BIS central bankers' speeches  diplomatic war (for some people, what is at stake here is the next Italian Prime Minister) and this would lead to a downgrade of Italy’s credit rating (currently at BBB), and a potential loss of its investment grade, which would force the ECB not to accept Italian bonds as collateral for the provision of liquidity and to stop buying Italian government bonds under its PSPP.