the financial fragility hypothesis, the theory of balance sheet recession have common reason and are connected with decoupling of borrowers debt from their assets that makes difficulties for repaying debt. In article it is argued that solution to debt crises is transition from debt relation to participation in assets which will allow providing coupling of debts with assets that means that decrease in value of assets will be accompanied with reduction of debt that will 1) make borrowers more flexible and allow them better adapting to economic changes and so increase competitiveness of firms and economy in whole and 2) provide more equal distribution of wealth, risks and losses and, thus, prevent the concentration of risk and make the financial system more stable
References
financial crisis debt fragility
Benjamin M. Friedman, Japan Now and the United States Then: Lessons from the Parallels, Institute for International Economics raquo ;, # justify gt; Glen Allen (2010), Quantitative Easing -A lesson learned from Japan, # justify gt; Banking and Monetary StudiesH. (1982), Can It Happen Again? A Reprise raquo ;, Levy Economics Institute of Bard CollegeH (1980), Capitalist Financial Processes and the Instability of Capitalism raquo ;. Journal of Economic Issues. Vol. XIV, No 2Rimkus (2012), The Japanese Debt Crisis (Part 1): Has Japan Passed the Point of No Return? Raquo ;, CFA Institute, http://blogs.cfainstitute/investor/2012/04/19/the-japanese-debt-crisis-has-japan-passed-the-point-of-no-return/
