“…Whereas the measures that concern lenders' behaviors (capital requirements or leverage ratios) are common to euro area countries and included in European directives (Capital requirement regulation [CRR]/capital requirement directive [CRD IV]), borrower‐based instruments (such as loans‐to‐value ratios or debt‐to‐income ratios) are left to national choices, creating heterogeneities in their implementation (Merler, 2015). The heterogeneity inside the Eurozone persists, with high levels of nonperforming loans (Table A1), insolvency (Table A3), and illiquidity risks in southern Europe (Tables A2 and A4), which limit the banks' access to the interbank market (Gabrieli & Labonne, 2022). Moreover, even if the risk associated with Eurozone sovereign and bank assets has decreased since 2013, the vicious circle between banks and sovereign risk remains (Colozza & Barucci, 2021).…”