“How we ended up there and how we got to where we are today, without having some basic.”

Eventually the banking systems of all advanced economies reach magnitudes of 500 percent,

More financial instability will introduce more uncertainty all down the line.

1000 percent or more of GDP, so that every economy starts to have financial systems that resemble recent cases like Switzerland, Ireland, Iceland, or Cyprus. That might be a very fragile world to live in.

We have never in human history seen a run-up in credit of the kind we have just witnessed in advanced economies since 1970.

We may end up with a world based more on equity than debt, or more on market debt instruments than bank intermediation; but how and why we get there is a mystery.

A possibility is that we see more and more leverage, and credit-to-GDP ratios rise once more to even higher levels.

If we have moved back to a regime of regular financial crises – like the one we had from the 1870s to the 1930s.

Non-trivial understanding of the financial sector, credit, and the banking system.

The basic aggregate measure of gearing or leverage is telling us that today’s advanced economies’ operating systems are more heavily dependent on private sector credit than anything we have ever seen before.

Then our economic future will be very different from our recent past.

Absent significant regulatory or tax changes, and a sharp transition could be disruptive.

To the security of employment at working age, to the challenge of accumulating for retirement.

In the immediate postwar era, financial crises in advanced countries were rare events, and before 1970 did not happen at all.

Macroeconomic stability will be more elusive and that will affect all of our lives: from the risks many will face in childhood.

Since then they have occurred more often, and 2008 was the most damaging of them all to date.

Furthermore, this pattern is seen across all the advanced economies, and isn’t just a feature of some special subset (e.g. the Anglo-Saxons).