If it is accepted that finance has its own cycle – of risk appetite, leverage, crisis and then de-leveraging – then a bigger financial system compared with the economy, unless accompanied by much more capital (and it wasn’t in the case of the big international banks – the reverse was true), risks de-stabilisation of the whole economy.
4 In the event, the boom ended in coincidence with a tightening of monetary policy and was followed by a recession, with price changes in the United States approaching deflation in the early 2000s. (4)  The boom in the Dutch housing market in the 1990s. In some respects, the housing market boom of the 1990s resembled the bubble of the mid1970s.