After major financial deregulation removing caps on lending rates, Norwegian banks began engaging in more risky credit operations and also resulted in a bank lending boom. This was followed by lower household investments. Bankers had no experience with competitive credit markets and requirements for on-site inspections were relaxed. In 1985 oil prices dropped significantly causing a Norwegian deficit and devaluation of the Krone. As public and private institutions began to consolidate their books, a recession began.