Governance of financial policies is also now being given proper attention. The European Commission has recently proposed a single supervisor for euro area banks. Single supervision is particularly important in a single currency area where countries are more immediately affected by instability originating from other member countries. Such single supervision should ultimately lead to a more stable financial system.
Had the result been “business as usual”, this would have probably made some market participants quite happy, but would have been a sign of failure. There is of course an issue of gradualism and calibration, with a view to avoiding the two extremes – an excessively abrupt adjustment and an everlasting phasing-out.