The financial crisis of 2007-2009, like many previous financial crises, was blamed in part on "excessive leverage."

Because of excessive leverage, if the firm's assets in mortgage-backed securities decrease by 25%, the firm will suffer a loss greater than its market capitalization.

It would reward sound management and deter excessive leverage and risk.

Rather, he contended, the problem was excessive leverage and lax lending standards.

At the root of the problem is the simple fact that labor has excessive structural leverage.

Poor risk management, excessive leverage of households and firms, misuse of certain financial instruments all played a part.

"So you can have a small fall in the market turned into a gigantic crisis because of the excessive leverage that people were allowed to incur," he said.

Recent computer-generated agency models suggest excessive leverage could be a key factor in causing financial bubbles.

The idea that stocks are inherently risky, and that the government should keep people from speculating with excessive leverage, seemed obvious in the 1930's.

Current economic thought attributes asset bubbles to excessive leverage, not excessive transactions per se.