diminish the need for policymakers to make the difficult decision to take away the punch bowl. Moreover, if discretionary macroprudential policy interventions are deferred until a boom is well under way, the macroeconomic spillovers could prove difficult for monetary policy to offset.
Major restructuring of the banking system was carried out to improve the efficiency of the banking system. The banking crisis came to its end in 1996–7 when the banks began to show positive profits, though structural changes in the banking system continued much longer. This is in brief the story of the Finnish financial crisis in the 1990’s.