The household debt service ratio, which represents the share of household after-tax income obligated to debt repayment, peaked near 14 percent in 2007 before dropping off to about 12½ percent recently. Despite its recent decline, this ratio is still above its average over the past 30 years.
In addition, more and more financial interaction is taking place within the financial sector itself: Financial assets held by the financial sector have increased by more than 100%. In comparison, the growth in total financial assets held by households and non-financialcorporations is significantly lower at around 50% and 70%, respectively. Two starkly different explanations for this phenomenon are currently being debated.