##h any temporary sacrifice the economy incurred in order to fulfill our stabilization goals. the road to the euro was not strewn with roses, it was not smooth and i don ’ t want to underestimate the difficulties. with regard to the sequence of policies and priorities, we took a calculated risk starting our stabilization policies by adopting a policy that allowed for a moderately appreciating real exchange rate. we walked on a tightrope, sometimes for months in a row, as there were occasional bouts of jitters based on market expectations, even until the last moment, that our euroarea entry would be deferred or that we would join at a significantly depreciated rate. accordingly, whereas our goals were ambitious, our policies erred on the side of caution. we made gradual adjustments and, as an insurance, always had at hand a sufficient large cushion of foreign exchange reserves and a relatively high interest rate differential vis - a - vis euro rates, even until the last few weeks before entry into the euroarea.

picking up and house prices are slightly decreasing relative to household income ( slide 26 ). risks related to growing indebtedness the mutually reinforcing cycles in housing and credit markets may, at times, turn out to be detrimental to financial and economic developments. in finland, the growth in household indebtedness has continued without interruption since the end of the 1990s, albeit more slowly in recent years ( slide 27 ). this debt accumulation includes features that increase risks and vulnerabilities for finnish households and the economy as a whole. firstly, household debt and the related risks are very unevenly distributed among households. a large amount of housing debt is borne by a small proportion of households with the highest debt - to - income ratios. for example, about half of the total amount of housing debt is with the most indebted tenth of all households in finland ( slide 28 ). secondly, owing to variable rate loans, there may be considerable annual variation in household interest expenses. lower interest rates and longer repayment periods since the turn of the millennium have kept households ’ annual debt - servicing burden in check, although the amount of debt has at the same time substantially increased ( slide 29 ). regional differences within a country there can be a strong regional divergence in house prices and household indebtedness within countries, too. these regional differences are driven by both demand and supply - side factors. growth areas are typically characterised by increasing population, younger residents, a better employment situation and higher household income than the national average. this is also reflected in brisker housing markets and higher house prices in these areas. bis central bankers ’ speeches for example, in finland the market conditions in the metropolitan areas are diverging from the conditions prevailing in areas where the population is diminishing. the largest housing loans are concentrated in the biggest cities and growth centres ( slide 30 ). in these centres, house prices are also highest ( slides 31 ). is there a need for public intervention? there is a strong public interest in preventing excessive credit growth and leverage. macroprudential policy plays a key role in pursuing that objective. housing market - related tools, such as maximum loan - to - value ratios, minimum risk weights for mortgage loans and countercyclical capital buffers, have recently been introduced in the toolkits of designated macroprudential authorities, including the financial supervisory authority in finland ( slides 32 – 33 ). owing to the lack of experience, some question marks remain. many