For research on the role of bank capital, see Basel Committee on Banking Supervision (2010); Macroeconomic Assessment Group (2010); and Firestone, Lorenc, and Ranish (2017). -7size of the economy is one-third the increase in household debt seen in the previous decade. Business debt rises in expansions.
It is a steady upward plod in borrowing over the long expansion—not a rapid expansion—that has now brought business debt to GDP back to historic highs. Seen this way, the current situation looks typical of business cycles. The mortgage credit boom was, because of its magnitude and speed, far outside historical norms.