"Procyclicality is the key issue in the time dimension. It reflects the tendency to take on excessive risk during economic upswings - too much punch from the punchbowl, if you will - and to become overly risk averse during the downturns. Procyclicality makes the financial system and the economy more vulnerable to shocks, and increases the likelihood of financial distress."
"...central banks have, through expanding their own balance sheets, in effect liquefied the private sector’s balance sheet and taken the unwanted assets off it."
Before the global financial crisis of 2007–2009, the United States and several other countries posted large current account deficits. Many of these countries also experienced asset price booms. Evidence suggests the two developments were linked.