BIS central bankers’ speeches  3  Second, some countries had clearly pursued imprudent fiscal behaviour over several years and entered into the financial crisis with too high debt and deficit levels – obviously, economic governance had failed to guarantee fiscal discipline. Moreover, some countries experienced the build-up of potentially hazardous private sector imbalances.
As the crisis has revealed, such private sector imbalances can quickly lead to a rise in public debt, thus exacerbating government sector imbalances.