The process still has some way to unwind. Slovene enterprises remain overleveraged, both relative to their euro area peers and historical trends. As long as the deleveraging process continues, the easing of monetary conditions will not necessarily induce higher borrowing. A note of caution is in order regarding boosting credit growth.
The financial crisis has demonstrated and recent empirical research shows that credit growth should not compromise financial stability. If we boost credit demand willy nilly without addressing the large sectoral and aggregate imbalances in the economy that had built up during the credit boom years, we may end up sowing the seeds of another financial crisis.