A long phase of heightened risk tolerance in our economies has come to an end. To the extent that the more recent turns in the markets correct past excesses, this is a welcome – if painful – process that we had anticipated and asked market participants to prepare for in past interventions.
At the same time, Finland lost some of her traditional export markets when the Soviet Union collapsed. In the course of the ensuing economic crisis, Finland’s GDP fell by some 14 per cent. The Finnish markka was first devalued (November 1991) and the floated (September 1992), depreciating all in all by about 30 per cent against the European currency unit (ECU).