6 To be clear, not all asset price bubbles create these risks to the financial system. For example, the bubble in technology stocks in the late 1990s was not fueled by a feedback loop between bank lending and rising equity values; indeed, the bursting of the tech-stock bubble was not accompanied by a marked deterioration in bank balance sheets.
Having done that, financial institutions need to draw the line between the operations where more resources should be allocated and those that should be scaled down or should be done with higher efficiency. They then need to come up with a specific action plan to carry out such management decisions.