Mr. Maekawa often compared a central bank to “dogan” and emphasized that it is important for a central bank “not to be influenced by the flavor of the time but appeal to the world by anticipating changing times and future directions always from an objective viewpoint”.
In a credit bubble, an increase in credit and leverage, and overheating in economic activity are two sides of a same coin. Examples are a substantial increase in housing investment in the United States and Europe and an expansion in demand for durable goods, such as automobiles, around the world including emerging and commodity-exporting economies.