A strong financial sector is a force for good. It intermediates funds from savers to borrowers, facilitating both investment and intertemporal consumption smoothing. Without this intermediation, economic activity would be severely constrained. Leverage, that portion of an undertaking financed by borrowing rather than owners’ equity, makes it possible for a resource-constrained entrepreneur to undertake a profitable venture. Insofar as the returns on the investment exceed the cost of borrowing, leverage amplifies the rate of return on equity.