It is one of the great myths of post-bubble economies that conditions are made much worse by banks’ unwillingness to lend. In some cases they are: the impulse for many lenders, particularly in the immediate aftermath, is not to build assets but to repair capital ratios.
But the bigger, more pervasive problem is on the demand side. Leverage becomes associated with hubris and ruin, rather than a short cut to growth.
via
the idea is, what is the main problem of low lending – not unwillingness of banks to give, and the reluctance of the private sector to take.
this , naturally does not pretend to be absolutism.
several charts from japan (from here)