It will be accompanied by a single mechanism for the resolution of banking crises and a harmonized system of deposit insurance, both of which are essential to align supervisory responsibility with crisis management and resolution, in order to sever the link between sovereign borrowers and banks. Work on these fronts needs to be accelerated.
Clearly, it is very important that individual central banks do their best to assess the implications of such shocks and that they respond promptly, within their respective monetary policy arrangements, to mitigate the effects on their own economies and on the world economy as a whole.