Second, we should put emphasis on the need to deal with the euphoria brought about by higher expected growth and the sharp drop in "finance premium" during the bubble period. The increasing collateral value compressed the finance premium for real estate and corporate borrowing.
The aggressive risk-taking was facilitated by financial deregulation and the higher expected growth rate under price stability, in part due to mistaken perceptions of future technological progress (Figure 7). 18. Today, we see a similar problem with low term- and risk premia, which constitute one of the causes of the "conundrum of global low long-term interest rates".