However, there are lessons to learn from what is happening around us which we must embrace, that will ensure consumers are not disadvantaged and left to bear the brunt of misjudgment and ill practices of financial institutions.
As banks are the main source of financing in the euro area, this could seriously jeopardise the flow of credit to enterprises and households. What lessons have we learnt? These developments in the euro area sovereign bonds markets offer one clear lesson: financial markets are prone to exaggerations, which amplify further the pro-cyclicality inherent in asset valuations.