Emerging from the global financial crisis, history was about to repeat itself. A fourth wave of a debt cycle followed, marked with similarities to the previous oscillations. It was fuelled by low global interest rates, a rise in regional banks, increased demand for local currency-denominated bonds, and increased demand for EMDE debt issued by an expanding non-bank financial sector.
Looking at policy responses, on the monetary policy front, the Bank of Japan’s (BOJ’s) first policy rate reduction after the burst of a bubble was carried out in July 1991, one year after  1  See, for example, Ahearne et al. (2002), Krugman (1998), and Posen (1998). 2  See, for example, Bullard (2010) and Rogoff (2010).