When, on 15 September 2008, Lehman Brothers filed for bankruptcy, the turmoil that had started a year earlier turned into an avalanche. The system moved into a chaotic state, mathematically and metaphorically. The crash In times of financial panic, banks and other financial intermediaries have an instinct to change the composition of their assets. They shed risky and illiquid investments and rush to liquidity.
Indubitably, a better fiscal result was achieved also on account of lower interest expenses both owing to the government’s diminished needs to borrow and monetary policy easing by the National Bank of Serbia. Lesser government needs for funding were one of the factors leading to the sharp decline in the share of public debt in GDP of 10.4 percentage points in 2017.