The unprecedented global financial crisis and economic downturn that hit the world in 2007–2008 has resulted in the deterioration of budget deficits and has caused an overall increase of sovereign debt levels globally. The turmoil of the banking sector was mitigated by a large infusion of...

During the peak of the crisis but also in the aftermath, it has been argued that there is a trade-off between competition and financial stability. Financial entities in distress have incentives to incur excessive risks and must be restrained in this tendency that characterises them. Competition...