Let me make three remarks on this: First, it is precisely the existence of OMT that contains the risk of such catastrophic scenario to materialise, since: •  by its very existence OMT eliminates the undue spread components and hence selffulfilling default trajectories. •  through conditionality OMT fosters incentives for sound economic and fiscal policies.
He set forth a description of the financial cycle that could be read as a loose paraphrase of Hyman Minsky’s theory of financial instability.9 He identified the procyclical and asset-correlation concerns regarding large bank activities that have commanded so much attention in the past several years.