Interesting how that happens.
We need a shift in thinking, argues the BIS. Pay less attention to the business cycle and more attention to what BIS economist Claudio Borio calls "the financial cycle." It typically lasts 15 to 20 years and may straddle several traditional business cycles. In its early years, the debt levels of households and businesses gradually increase. This strengthens economic growth, drives up asset prices - especially of real estate - and makes debtors feel richer. With credit plentiful, homes, stocks and businesses are worth more. This is the cycle's expansive phase. But "when financial booms turn to busts," the depressing phase has devastating consequences. Defaults multiply. Asset prices collapse. The fallout lingers.