The continued benign environment of high growth, low inflation, and accommodative financial conditions led to the prevalence of optimism for the future (which in retrospect is hard to believe). Meanwhile, overconfidence also spread in the sophistication of financial technologies that were developing remarkably at the time.
In those circumstances, imbalances such as the increase in credit and leverage as well as the rise in asset prices accumulated worldwide. Developments since last autumn can be described as essentially the adjustment of the accumulated imbalances; in other words, the bursting of a global credit bubble. Nevertheless, world economic conditions have been showing signs of leveling-out since the spring of this year.