As mentioned by Andrew Crockett, a macroprudential perspective suggests two ways in which resiliency should be strengthened: the first is to treat the financial system as a whole as the “portfolio” of assets subject to safety and soundness oversight; the second is to apply stricter regulations on firms of systemic importance whose failure would carry a good chance of endangering the entire system.
However, the temptation to reach the prosperity of Western Europe overnight prevailed, and the vicious circle of wages and prices kept tightening. Economies kept going and wage increases of 20–30% a year became a fact of life. In Latvia, salaries more than doubled between 2004 and 2008 opening a wide wage-productivity gap.