Subsequently, the economic bubble burst and low growth ensued, moving around 1.5 percent in the 1990s and falling below 1 percent during the 2000s. The stagnation of the 1990s can be largely attributed to the bursting of the economic bubble and malfunctioning of the financial system. It was widely believed that the economy would regain strength once the nonperforming-loan (NPL) problem was resolved.
Although central banks in some SEE countries have already made progress in financial stability assessment, more work needs to be done and such assessments need to increasingly take into account potential repercussions from regional and wider European developments. The above considerations indicate areas where further assistance may be required by particular countries.