Case Finland.
Most of our domestic debt is household mortgages. Varying estimates go between 60 and 70% debt rations. In short, this means, that households have elected to live beyond their means (by taking a debt to purchase an asset they cannot afford at current time). They are expecting a) the value increase of the property to cut some slack, and b) they are expecting their income level to remain stable.
Current account deficits, however, imply that we're leaking money. This means, we're being Squanderville. We're lending money from abroad to cover our current living standards. We're neglecting the possibility not to purchase above our income, while the possibility is there. People are expecting their future to be brighter than it perhaps is. The banking system isn't systematically to blame of this - it's ultimately the people's fault for being overly optimistic. If, and a pessimist might say when, the inevitable convergence hits, things will go dire.
Here's how things will go dire: the presumption that property values never go down is a strange one. It hasn't got anything to do with anything but false expectations and herd psychology (Akerlof and Shiller discuss this to an extent in relation to bubbles). Property, house prices, have been on rise because people are willing to take more extensive debt to purchase a house where they want it - they're expecting to be able to pay it back. In this fashion, it's a systematic illness not only inherent to banking system but to the people in general.
If, suddenly, people's incomes fall, they will become increasingly unable to deal with their interest payments and debt repayments. Banks will start drawing back their property. House prices will probably bust, due to the fact that reduced incomes reduce the demand for excessively expensive houses bought with debt money on high expectations on future income.
This will leave people with debt - and debt 'slavery'. Why? Because they had unrealistic expectations of a) their future income, and b) the value of their assets.
If you're to blame this on the banking system you're barking on the wrong tree.
Accumulating national debt has more to do with factors like the pension scheme, poor productivity in terms of wages (cuts exports, cuts employment, latter of which causes public costs - again, an attempt to live above our means. baumol's disease is very closely related to this; the lack of means to converge through inflation, currency cuts, or wage cuts, is causing 'violent convergence' through other applicable methods: convergence is however somewhat inevitable - briefly stated in Buffett's paper, more broadly discussed in King's book).
Yes, the trigger would be the lending facility. But the underlying problem isn't the lending facility: it's people's expectations. Hindsight is a wonderful thing, but I don't remember these anonymous authors presenting their videos before the internet age, e.g. say during the savings and loan crisis in US.
Different asset markets will function a lot like housing markets when they're debt leveraged: buying a house with a debt leverage isn't much different from buying a financial asset with a debt leverage. You're expecting your ability to pay the debt and the asset's value to work so that it's a good plan: if this is false, why are you blaming someone other than yourself over it?
Lending facility, credit expansion, do allow it: but, given that they also allow positive things to happen (like investments in actually profitable projects), why should the messenger be shot?
Here's ultimately what I think.