While the ability of some smaller banks to lend is restricted by the loan-to-deposit ratio regulations, sluggish credit expansion was not primarily a result of liquidity constraints, Barclays analysts said.

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Using big loans to finance expansion, it has a sky-high debt-to-equity ratio of more than 300%.

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Yet after the 2000 recession, the job market never fully rebounded: the ratio remained well above 1:1 throughout the most recent expansion.

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