Sudden reactions to unusual events make bad policy. That being said, an asset whose price is growing at 20%/year is safe to lend against. If there was no asset

Sudden reactions to unusual events make bad policy. That being said, an asset whose price is growing at 20%/year is safe to lend against. If there was no asset bubble, there would be no credit crisis. It’s hard to think of which institutions are appropriate to defend against excesses in an asset price bubble without harming the credit market in more normal environments.