In some cases, this problem was tackled by means of interventions that directly sought to restore appropriate capitalisation levels through incentives to restructure bad loans and free up resources for new economic activities. In other cases, governments have reacted by delaying recapitalisation, instead issuing guarantees on bank liabilities.
It has been argued that such measures tend to provide banks with an incentive to roll over bad loans and shift risks to depositors or the government.6  5  See ECB Monthly Bulletin May, 2012 on “Comparing the recent financial crisis in the United States and the Euro Area with the experience of Japan in the 1990s”.