Abstract
Excessive risk-taking of financial agents drew a lot of attention in the aftermath of the financial crisis. Low interest rates and subdued market volatility during the Great Moderation are sometimes blamed for stimulating risk-taking and leading to the recent financial crisis.
In recent years, with many central banks around the world conducting the policy of low interest rates and mitigating market risks, it has been debatable whether this policy contributes to the building up of another credit boom.