Insofar as these fiscal outlays raised government borrowing costs and threatened market access, the effect of insufficient insurance against banking crises was also to over-burden fiscal policy when it was the most needed to support growth, thus making the euro area even more unstable at a national level.
For example, the Bank of England has recently included a financial stability knock-out in its forward guidance on monetary policy (Kohn (2013). BIS central bankers’ speeches  3  As noted by Federal Reserve Governor, Jeremy Stein (2012), monetary policy“gets in all the cracks” of the financial system.