Turning to another example, the interest rates of some countries proved too low during the first decade of the euro, leading to house price booms and credit growth in those countries. These two factors have contributed to the recent crisis. Again, local problems turned into a systemic problem. Here, the solution is a balance sheet adjustment of banks and households.
And again there is no getting round this tedious approach. The instruments to address the systemic component that are now available may assist this process. At the end of last year we saw clear signs of a systemic financial crisis.