diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/ExpressionCodegen.java b/compiler/backend/src/org/jetbrains/jet/codegen/ExpressionCodegen.java
index e136eca297e..e01ad3caf82 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/ExpressionCodegen.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/ExpressionCodegen.java
@@ -948,7 +948,7 @@ public class ExpressionCodegen extends JetVisitor<StackValue, StackValue> {
         }
     }
 
-    private void doFinallyOnReturnOrThrow() {
+    private void doFinallyOnReturn() {
         for(int i = blockStackElements.size()-1; i >= 0; --i) {
             BlockStackElement stackElement = blockStackElements.get(i);
             if(stackElement instanceof FinallyBlockStackElement) {
@@ -969,7 +969,7 @@ public class ExpressionCodegen extends JetVisitor<StackValue, StackValue> {
         final JetExpression returnedExpression = expression.getReturnedExpression();
         if (returnedExpression != null) {
             gen(returnedExpression, returnType);
-            doFinallyOnReturnOrThrow();
+            doFinallyOnReturn();
             v.areturn(returnType);
         }
         else {
@@ -2648,7 +2648,6 @@ public class ExpressionCodegen extends JetVisitor<StackValue, StackValue> {
     @Override
     public StackValue visitThrowExpression(JetThrowExpression expression, StackValue receiver) {
         gen(expression.getThrownExpression(), TYPE_THROWABLE);
-        doFinallyOnReturnOrThrow();
         v.athrow();
         return StackValue.none();
     }
diff --git a/compiler/testData/codegen/regressions/kt1688.kt b/compiler/testData/codegen/regressions/kt1688.kt
new file mode 100644
index 00000000000..0bbc232c5f1
--- /dev/null
+++ b/compiler/testData/codegen/regressions/kt1688.kt
@@ -0,0 +1,10 @@
+fun box(): String {
+    var s = ""
+    try {
+        throw RuntimeException()
+    } catch (e : RuntimeException) {
+    } finally {
+        s += "OK"
+    }
+    return s
+}
diff --git a/compiler/tests/org/jetbrains/jet/codegen/ControlStructuresTest.java b/compiler/tests/org/jetbrains/jet/codegen/ControlStructuresTest.java
index f00acbd182f..1093ae46aa5 100644
--- a/compiler/tests/org/jetbrains/jet/codegen/ControlStructuresTest.java
+++ b/compiler/tests/org/jetbrains/jet/codegen/ControlStructuresTest.java
@@ -337,17 +337,17 @@ public class ControlStructuresTest extends CodegenTestCase {
         blackBoxFile("regressions/kt2147.kt");
     }
 
-    public void testIfDummy() throws Exception {
+    public void testIfDummy() {
         createEnvironmentWithMockJdkAndIdeaAnnotations(CompilerSpecialMode.JDK_HEADERS);
         blackBoxFile("regressions/kt1899.kt");
     }
 
-    public void testKt1742() throws Exception {
+    public void testKt1742() {
         createEnvironmentWithMockJdkAndIdeaAnnotations(CompilerSpecialMode.JDK_HEADERS);
         blackBoxFile("regressions/kt1742.kt");
     }
 
-    public void testKt2062() throws Exception {
+    public void testKt2062() {
         createEnvironmentWithMockJdkAndIdeaAnnotations(CompilerSpecialMode.JDK_HEADERS);
         blackBoxFile("regressions/kt2062.kt");
     }
@@ -356,4 +356,9 @@ public class ControlStructuresTest extends CodegenTestCase {
         createEnvironmentWithMockJdkAndIdeaAnnotations(CompilerSpecialMode.JDK_HEADERS);
         blackBoxFile("regressions/kt910.kt");
     }
+
+    public void testKt1688() {
+        createEnvironmentWithMockJdkAndIdeaAnnotations(CompilerSpecialMode.JDK_HEADERS);
+        blackBoxFile("regressions/kt1688.kt");
+    }
 }