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But throughout history, loose monetary conditions have fuelled the cycle: cheap money encourages leverage which boosts asset prices, which in turn encourage further leverage.
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"The concessional rate of taxation of capital gains might encourage leverage speculation, particularly in combination with negative gearing provisions".
As economist Douglas Holtz-Eakin points out, the tax code is rife with provisions that encourage leverage and discourage investment.
"If anybody knows how to create rain upriver of where we are today, I encourage you to leverage the impact that you have," he said.
We also set up a new premiere campaign, giving big awards to small business, to encourage them to leverage Alibaba.com.
Do you encourage teachers to leverage their connections to create new opportunities for students?
Corporate finance everywhere is skewed by the tax deductibility of interest, which encourages excessive leverage.
"The U.S. tax system encourages household leverage and bank leverage, even though both are potentially destabilizing," is the way Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, put it in a recent speech.
Until now the rules have encouraged higher leverage in good times and much lower in bad times, adding to distress at just the wrong moment.
And they encouraged reckless leverage and low-quality debt, complicated, un-researched, generally disgraceful.
But in banking we limit leverage (debt relative to equity) through regulation while encouraging leverage through the tax code.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com