During the expansion prior to the crisis, against an international background marked by low interest rates, optimistic expectations about economic growth and underpriced risks, the debt levels of households and non-financial corporations in the advanced economies increased markedly. In Spain this phenomenon became notably acute and debt ratios higher than those observed in peer countries were recorded (see Chart 2.1). EMU membership prompted an upward revision of expected incomes and set in place very loose financing conditions, the expansionary impulses of which on lending were not sufficiently countered by other economic policies. With the onset of the crisis, whose recessionary effects were sharper in Spain than in other countries owing – among other causes – to burgeoning private debt, the value of household and corporate wealth and future income expectations were revised downwards. Under these conditions, lowering the debt ratios of the non-financial private sector became a necessity. While these ratios have fallen from their mid-2010 peaks, they are still higher than in the past and exceed those of other developed economies.