7 The requirements announced by the Bank at the end of March 2010 (in what was known as PCAR2010) assumed that all of the NAMA purchases would involve haircuts as large as thefirst tranche, and also took account of forward-looking loss estimates in a base case and a stress scenario of the non-NAMA books.
These were matched by rapid credit expansion, asset-price booms, and negative savings in many Western economies. These trends were encouraged by policies such as inflexible exchange rates and an overreliance on export-led growth in Asia and, in the United States, the promotion of unsustainable household spending in response to the bursting of the tech bubble.