Lord Adair Turner states that private debt used to be around 50% of GDP and that the ratio is now around 180%. He argues that economic instability increases when credit grows much faster than GDP. This led to the financial crises and that the slow recovery is the result of a "debt hangover". He would prefer to have an economy that is less dependent upon credit growth and more stable as a result.
The growth in credit has been driven by investment in existing assets such as real estate. To some extent this has been possible because of changes in the economy. The fastest growing sector of the economy has been in high tech start ups like Facebook. They have taken advantage of price deflation in information technologies to build firms that are less capital intensive than manufacturing. They also decrease the demand for human capital which contributes to income inequality in two ways: wages fall and investors in high tech start ups have become extremely wealthy through stock price appreciation. Much of this wealth is saved and helps to fund household borrowing for consumer products and residential real estate.
Ordinarily, interest rates could be used to limit credit growth. That would have a negative effect on the economy. Turner argues that macro prudential tools could limit credit growth by making credit more difficult to obtain by other means.