64-65), while the appropriate compulsory rules for banks did not then exist, the Bank could have promoted the application of ceilings on the expansion of credit along three different avenues: containing or limiting risk concentration in the real estate development and construction sector; controlling or limiting leverage (the relationship between assets and liabilities, between exposures and their financing); and controlling or limiting the mortgage loan amount as a proportion of the value of the collateral (LTV). But these instruments were not at that time those habitually used by supervision, given that a microprudential approach was followed, focusing on ensuring the solvency of individual institutions. The restructuring and recapitalisation strategy Secondly, I am going to address the strategy adopted as from late 2008, which is analysed in detail in the second and third chapters of the Report. I shall review the main developments using, as the Report does, a timeline that helps better explain the measures adopted in their context at each point in time. I shall later also refer to some of the most frequent or significant questions posed about the strategy that was adopted. From late 2008, at a time marked by the serious downturn in international financial markets following the collapse of Lehman Brothers in September that year, liquidity support mechanisms for the financial system were set in place through the establishment of the Fund for the acquisition of high-quality financial assets and the development of a system for the granting of State guarantees for specific issues.

These effects are greatly amplified by global supply chains, which transmit spillovers from bilateral tariffs, affecting countries up and down the value chain. An intensification of trade tensions or a disorderly Brexit outcome—with further repercussions for global growth and risk aversion—could, however, affect other economies that are highly dependent on foreign demand and external financing. Over the medium term, in absence of corrective policies, trade tensions could become entrenched, and further divergence of external stock positions could trigger costly disruptive adjustments in key debtor economies that could spill over to the rest of the world. According to Bloomberg analysis, the strongest negative impact from the trade tensions could be felt in 2021, affecting the global GDP negatively by 0.6 p.p., with several scenarios in place - failure of reaching an agreement and limited escalation of the trade tensions; failure of reaching an agreement and trade war; and reaching an agreement in 2020. It is imperative that all countries avoid policies that distort trade. Recent trade policy actions are weighing on global trade flows, investment and growth, including through confidence effects and the disruption of global supply chains, with no discernible impact on external imbalances thus far, but risks remain. External imbalances in the CESEE region countries In the following section, we provide for a short overview on the external position of the region5, analyzed through the current account position of the individual countries and the region as a whole, as well as the international investment position.