Which factors can account for the leveraging up of public and private balance sheets? The determinants of trends and ﬂuctuations in public debt ratios are rather welldocumented. Historically, spikes in public borrowing often followed armed conﬂicts, recessions, and ﬁnancial crises. On a more general level, the role of the state for the macro-economy has changed.
Particularly in the second half of the 20th century popular  demands on governments, for health care, or pensions became an important driver of public debt ratios across the Western world (Eichengreen, El-Ganainy, Esteves and Mitchener 2019). This increase in private leverage has been driven by several factors. First, ﬁnancial development and ﬁnancial integration have proceeded rapidly over the past century.