Even were that not the case, it is important that intrusive prudential supervision should not come at the cost of the consumer. And this is particularly relevant for action on NPLs, which by its very nature relate to dealing with distressed borrowers – that may, for example, be at risk of losing their family home, or small enterprises that are providing local employment.
In hindsight, a better way to detect the signs of danger would have been to complement the sound monetary and fiscal policies with flexible exchange rate, better regulations and supervision of the financial sector, greater disclosure, transparency and communication.