The limitations of the intellectual climate Part of the reason is that the approach taken towards financial integration and banking activity reflected two features of the dominant economic thinking at the time. 3  See A. Alter and A. Beyer, “The dynamics of spillover effects during the European sovereign crisis”, CFS Working Papers, No. 2012/13, 2012; Popov, A., and N. van Horen, 2013.
Possible measures include improving the fiscal position, controlling inflation, and performing the delicate balancing act of bolstering financial regulatory and supervisory frameworks without limiting market development and innovation. Open, liquid, and transparent financial markets are beneficial in this aim. Structural reforms and healthy prospects for economic growth are also important.