A common cause of the vast number of financial crises experienced in various countries at different times is excessive debt accumulation without enough awareness of the consequent risks. Most debt-fuelled booms end badly. Financial crises generally tend to be protracted affairs.Sometimes, inertia and denial on the part of the policy makers add to the duration of the crisis period.
The situation in Slovenia conforms to this pattern. The rapid economic growth that followed European Union accession in 2004 was fed by excessive borrowing and risk taking by banks and enterprises. Banks relied heavily on external wholesale funding and the rapid credit expansion took place against very limited equity capital in the corporate sector.