But despite the considerable effort that has gone in to recapitalising, shrinking, restructuring and otherwise reforming the banking system, the process is by no means complete and significant challenges remain. How much longer will this process take and what can be done to speed it up?
Reaching a safe budgetary position in good times is necessary to ensure that fiscal policy has room to cope with asymmetric shocks, which can no longer be addressed by monetary policy. Not least for these reasons, it is a matter of concern to the ECB that a number of Member States are struggling to live up to their commitment to fiscal discipline.