A plan provides the necessary clarity of mind by focusing efforts and uniting people around a common goal. Even a strategy that is half-baked but gets you out of immediate danger is better than waiting for the perfect answer and being annihilated. Part of the plan to end the financial panic had to include reducing uncertainty over objectives. Some fretted that actions to save a crumbling system would encourage reckless behaviour in the future. Ben Bernanke was clear that invoking moral hazard in the middle of the U.S. financial crisis was misguided and dangerous. 20  Using the power of narrative, he challenged the arguments of the ‘moral hazard  fundamentalists’ in his oft cited and simple hypothetical example: do you let the man who smoked in bed die in the burning house to teach him a lesson? Or do you save him, stop the risk of surrounding houses catching fire and then reprimand him for reckless behaviour? 21  4. Humility The final essential leadership quality is humility. Recall what I said about this speech being a target-rich environment? Good leaders combine personal humility, self-knowledge and the ability to learn. That means admitting mistakes, seeking and accepting feedback and sharing the lessons you have learned. When leaders become over confident (or turn to writing books), they stop learning.
At the outset of the global crisis, the average private debt level reached around 96% of GDP (2009), doubling compared to 2000. The post-crisis adjustment was mostly visible in the Baltic countries, where half of the pre-crisis rise was reversed. In the CEE and SEE countries, the adjustment was lesser. According to the latest available data (2017), given the decoupling in the speed of the post-crisis adjustment, private debt level in the different sub-regions started to converge. The average private debt level in 2017 stood at around 82% of GDP, with Baltics hovering at around 90%, SEE at 84%, and in the CEE region, standing at 75% of GDP. 4  Chart 3. Total private debt  Chart 4. Change in private debt to GDP ratios  (in % of GDP)  (in percentage points)  140.0 120.0 100.0 80.0 60.0  CEE  SEE  Baltics  Region  2016  2014  2012  2010  2008  2006  2004  2002  40.0  *Region refers to all the countries in the sample from CEE, SEE and the Baltics. Source: IMF Global debt database. The crisis accentuated the risks of high private sector indebtedness as important source of macro-financial vulnerability. In the CESEE region, some of these risks came to the fore in their banking systems, in the form of significantly rising NPLs during the crisis, following the years of high credit growth.