We  6 7  See Minsky, “Financial Crises,” in note 3. A more highly leveraged sector is one that relies more heavily on borrowed money. -8saw this chain of events play out repeatedly in various parts of the financial sector in the weeks following the failure of Lehman Brothers in 2008.
In our surveillance, we examine leverage across many types of financial institutions, including banks, insurance companies, hedge funds, and various funding vehicles. Currently, we do not detect a broad-based buildup of abnormal or excessive leverage. As with banks, capital levels at insurance companies and broker-dealers appear robust.