The economy was not able to absorb of the excess liquidity from oil revenues and foreign investments in productive sectors.
This resulted in significant flows to non-priority sectors and to the capital markets, mostly in the form of margin loans and proprietary trading camouflaged as loans.. As a result, market capitalisation of the NSE increased by 5.3 times between 2004 and its peak in 2007, and the market capitalisation of bank stocks increased by 9 times during the same period.