There was very strong demand for residential housing loans, particularly by investors. Price competition in the mortgage market had intensified and discounts on advertised variable rates were common. There also seemed to be a relaxation in non-price lending terms. The share of new loans that were interest only was drifting up and the growth of lending for investment properties was accelerating.
Concerned credit institutions handed over or sold their vaults, or converted or use them for other purposes. In response to this widespread outsourcing, MNB initiated laying down the legal foundation for the performance of cash processing activity outside the central bank. As a result, starting in 1997 cash processing activities outside the central bank are conducted within regulated framework.