In some western countries, notably in the Scandinavian, the banking community also faced substantial difficulties, albeit of a different nature. Since the Mexico crisis of 1995, awareness among policy-makers of the potential damage that can result from banking problems has grown significantly. In emerging markets, banking problems often result in much deeper recessions than in industrialised countries.
This largely reflects the volatility in the annual rate of change in energy prices. Measures of underlying inflation remain generally muted, but labour cost pressures have strengthened and broadened amid high levels of capacity utilisation and tightening labour markets.