The latter half of the 1980s should have been a period during which financial intermediation progressed from a bilateral transaction basis to a market transaction basis. The rise in asset prices, however, expanded bank lending using real estate as collateral, the classical bilateral transaction type of financial intermediation.
If firms become fixated on maintaining all of their business lines, they will be slow to realign their business portfolios and will end up losing focus. As excessive costs build up and profits decline in such firms, growth in employee wages will end up being constrained, which will in turn increase concerns regarding the future.