In contrast to the favorable financing conditions for large businesses with access to capital markets, financing conditions for small businesses remain tight, with lower lending activity and signs of deteriorating loan performance. Small businesses tend to be concentrated in sectors that entail high direct contact, operate with relatively tight cash  -3buffers, and rely on bank credit rather market-based finance.
As a consequence of excessive domestic demand, several countries recorded very high current account deficits and were dependent on strong inflows of foreign capital. At the same time, due to the overheating of the domestic economy and associated pressures on  BIS Review 70/2009  1  wages and prices, countries operating under fixed exchange rate regimes underwent strong losses in external competitiveness.