A reflective summary of the problems outlined above, along with their linkages to the real economy, can be had by taking stock of the key adjustments that have taken place on banks’ balance sheets in the wake of the 1997 crisis. Starting with the liability side, the left hand panel of Figure 13 shows that the share of deposit has increased significantly since the crisis in line with the economic recovery. At the same time, commercial banks have substantially reduced their reliance on foreign currency debt as a source of funds. This has been accompanied by a lengthening of the maturity profile of their borrowings, two-thirds of which consisted of short-term loans before the crisis. With respect to the use of funds, the right hand panel of Figure 13 captures the considerable decline in private credit in commercial banks’ asset portfolio. This decline has been compensated for by higher investments in foreign assets and government securities. Reflecting the growing size of the bond market, commercial banks’ corporate bond holdings have also risen, and the associated increase in interest rate risk has to be managed carefully going forward