But a number of those measures unintentionally triggered problems in other countries. The chain effect of raising the deposit guarantee scheme protection is a clear example. The introduction of higher levels of depositor protection triggered a flow of savings out of other countries, forcing other governments to implement similar policies. Coordination could have prevented negative side effects.
Such instruments come in many shapes and can be linked to cyclical developments. It will be a challenge to develop efficient economic instruments in a world with free flows of capital – not least within the EU.