Growing stresses in the banking system fuelled by an escalation of the euro-zone crisis prompted the major central banks to announce measures aimed at enhancing their capacity to provide liquidity support at the end of November. Coupled with renewed optimism that policymakers may be inching towards agreement on another grand plan to save the euro, this announcement triggered a sharp rebound in the prices of risky assets after a mostly torrid month. Nonetheless, we think the crisis is far from over.