Second, banks' increasing uncertainty about their own risks in the structured credit market and the creditworthiness of their counterparties turned out to be a handicap. Even the affected banks themselves did not know which contingent liabilities should be recorded on their balance sheets. Moreover, they had a lot of difficulty gauging the creditworthiness of their counterparties quickly and with sufficient accuracy. This confidence problem was particularly apparent in the interbank market. The risk premium for unsecured interbank loans has more than tripled since the onset of the US mortgage crisis. And, third, it has become clear that risk management has its limitations. In the area of market risk, events have occurred that – according to the models used – should not even have been possible, or at least would have been considered extremely unlikely. In the case of liquidity risks, it has become clear that assumptions and precautions based on normal times are not appropriate in extraordinary market situations. Possible risks: contagion effects in related markets and deterioration of environment What comes next? Is the worst already past? Unfortunately, there is no clear answer to this question. A risk analysis reveals that, ultimately, the future course of the crisis is likely to be determined by two major risks. First, it is not impossible that problems which have so far been limited to a few partial markets could spill over to additional markets. Such a danger of contagion mainly exists for related credit markets that have so far been largely unaffected by the turmoil.

The regulatory response to the crisis was oriented towards strengthening the banks’ soundness as well as designing treatment of systemically important banks which certainly require a special attention by the authorities. Systemic risk requires systemic and comprehensive solutions, including changes in the institutional setup. In the EU it was done by establishing crisis management mechanisms, strengthened governance aimed to monitor and prevent against any macroeconomic imbalances, as well as to move towards the banking union. The EU member states and institutions face many challenges when making the new institutional setup operational and when making the necessary adjustments in a reasonable time framework. In addition, all other countries face the challenge of converting the lessons from the crisis into policy actions. The changing role of central banks During the crisis, the role of the central banks moved from traditional way of monetary policy implementation towards combining the monetary and financial stability objectives, both being complementary components of macroeconomic stability. The set of instruments became more complex because of the unconventional measures, designed to bridge the period of extraordinary circumstances affecting the effectiveness of standard instruments, and aiming to strengthen the financial stability or economic recovery. Due to the variety of those unconventional measures across the countries, it is still difficult to assess their impact, although the experiences of countries could confirm the quite largely accepted consensus that the "monetary stimulus" really supported the economy.