The second key aspect of Estonia’s experience refers to the importance of both the effective prevention and, if necessary, decisive correction of economic imbalances. With the benefit of hindsight, it is clear that Estonia’s overall policy stance should have been tighter in order to contain demand pressures and the emergence of significant macroeconomic imbalances during the time of very fast growth.
Though I would not attempt a post mortem of why RBS had failed to take off, let me share that our internal assessments showed that the banking system was not really ready for the introduction of RBS when we first attempted it in 2003–04.