At a fundamental level, however, the crisis also reflects the effects of long periods of excessively loose monetary policy in the major advanced economies during the early part of this decade. After the dotcom bubble burst in the US around the turn of the decade, monetary policy in the US and then in other advanced economies was eased relatively aggressively.
Policy rates in the US reached one per cent in 2002, and were held around these levels for an extended period, longer than was probably necessary (Taylor, 2009; Yellen, 2009).