Euroland. After more than a decade of free credit and money printing, the whole system is just waiting to keel over.

 Europe has built a Maginot Line which might safeguard against a repeat of the sovereign debt crisis of a decade ago, but that's not where the onslaught will come from.

The substantially unregulated shadow banking sector is today bigger than the entirety of the banking industry. 

Who knows what nasties are incubating in its murky depths, just waiting to hatch on a wave of rising interest rates. And when they do, the European Central Bank will face exactly the same conundrum as the Bank of England. 

Containing the risk of dysfunction by intervening in bond markets will run counter to the ECB's main function of fighting resurgent inflation, which requires tighter monetary policy, not the loosening implied by asset purchases. 

There is a real danger that any such intervention will be seen not as safeguarding financial stability but as fiscal dominance, and therefore add to the volatility in bond markets.

I can't tell you when the eruption will happen, or where it will initially take place, but a dime to a dollar Britain is just the front runner in a much wider fiscal and financial crisis that will again challenge the euro's very existence in its present form. 

After more than a decade of free credit and money printing, the whole system is just waiting to keel over. What's so troubling is that there is nothing left in the fiscal and monetary cannon to counter the collapse when it comes.

Jeremy Warner Telegraph 19 October 2022 

https://www.telegraph.co.uk/business/2022/10/19/eu-cannot-insulate-coming-cataclysm/