BIS Review 120/2010  3  Consumer confidence was held up by low interest rates, the feared collapse in construction activity did not materialize, the rise in unemployment proved to be far less than forecast. Three additional factors contributed to this relatively favourable outcome. Firstly, government finances were initially in good shape.
As a result, risk premia remained low, despite significant deterioration in the fiscal balance. Secondly, the banking sector remained in a strong position throughout the cycle. It seems that the vaccination against extravagancies obtained during the banking crisis of the early 1990s was still effective 15 years later.