[36] When the next crisis struck, the Estonian banking system was effectively owned by foreign banks. Less than 10 years later, the global financial crisis and the European debt crisis placed additional strains on the Baltic economies.
Prior to the global financial crisis, the Baltic countries experienced high capital inflows and strong growth, and there were signs of over-optimism, fuelled in part by accession to the EU (European Union). [37] The real exchange rate appreciated as capital inflows pushed up prices for non-tradables. A typical boom-bust cycle followed.