However, from the outset the central bank introduced liquidity support measures, and after risk appetite seemed to be stabilizing, we begun to lower or policy rates gradually, keeping in mind that we must  BIS Review 134/2010  1  not let sudden movements in risk appetite to translate into potentially destabilising balance sheet effects.
How can we address these vulnerabilities, that are a threat in themselves but also constrain the effectiveness of economic policies so much? There are no quick fixes here. While the pre-crisis level of indebtedness of households was not particularly high by international standards, its currency composition became very risky.