" He views it as a poor "substitute for creating soundness and reasonable levels of leverage throughout the system.

WSJ: The Weekend Interview with Paul Singer: Mega-Banks and the Next Financial Crisis

At the same time, regulations require the banks to hold 8 percent in capital when lending to job creating small businesses and entrepreneurs, i.e. an authorized leverage of 12.5 to 1.

FORBES: Connect

Then, in July 1997, the Asian Crisis hit, and everyone looked on in horror as hot money from global hedge funds, fueled by the steroid of high leverage, brought the economies of Thailand, Malaysia and Indonesia to their knees, first creating asset bubbles when it flowed in, and then causing the local currencies to collapse when it was suddenly withdrawn.

FORBES: A Convertible Redback