Preparing for the Next Financial Crisis

Institutions 313

10.3 European aspects

These aspects concern primarily the euro area and draw on both general aspects

(10.1) and international aspects (10.2). Indeed, the single market for nancial ser-

vices and the single currency act as powerful forces for nancial integration at the

national level, but also facilitate contagion (Chapter 1) between euro area econ-

omies. In the euro area, runs in vulnerable countries can take both the form of

traditional bank runs (Chapter 1) and the form prevailing at the international level

(10.2.1.2): the drying up of renancing of the banking system by non- resident

banks, the ight of deposits abroad and the sale of securities, in particular sovereign

securities, issued by residents. These manifest