For instance, bank lending to businesses increased by 41 percent last year, compared to only 11.3 percent the previous year; and credit to households rose by 15.8 percent in 2011, which is higher than the 12.5 percent growth rate of the previous year. Overall, the annual growth in private sector credit more than doubled in 2011, from 11.9 percent to 26.4 percent.
Besides the domestic and external inflation environment of 2011, monetary policy was conducted against the background of global economic instability and uncertainty, to which I referred earlier. Oil prices were volatile, the Euro area sovereign debt crisis worsened and this created turmoil in major financial markets, which brought about fears of renewed banking crisis.