This combination could lead to inappropriate behaviour in the form of excessive risk-taking and risk illusion among borrowers and credit institutions..." 16 The Council therefore urges banks to exercise suitable caution when granting mortgage loans, particularly when granting interest-only loans or loans with variable interest rates.
It should be borne in mind that this crisis was not just a temporary one, and that a new steady-state equilibrium might have been created as the crisis has become prolonged. Low interest rates may have already become entrenched in our economy, for instance, and breaking from them to achieve normalization could carry other costs.