6  BIS Review 35/2002  Treatment of insolvent/undercapitalized financial institutions As a result of such disposal of NPLs and their removal from balance sheets, insolvent financial institutions have no choice but to exit from the market. In such cases, non-viable financial institutions should be disposed of in an orderly manner.
In so far as the traditional Finnish problem of inflationary pressure and eroding competitiveness was due to insufficient credibility of monetary policy, price stability and competitiveness could be better in EMU than before. It was also expected that interest rates would be more stable - and on average lower - in the monetary union than under autonomous monetary policy.