It’s far safer to maintain a relatively steady speed, accelerating and decelerating gently as necessary, than to swing between extremes. So it is with examination. If examiners do not evaluate banks’ practices with sufficient rigor during the boom years, then it may be necessary to take a more draconian approach during the bust years, when problems are revealed.
That said, overall corporate profits have been above pre-pandemic levels and at record highs, although the situation varies across firms depending on their size and industry.