If higher leverage is associated with greater risk, explain why the process of deleveraging $($reducing leverage$)$ can be destabilizing.

The problem arises if $($Click to select$)vv$ institutions try to reduce their leverage at the same time. A large number of institutions $($Click to select$)vv$ assets will push $($Click to select$)$ asset prices. With asset values $($Click to select$)vv$ relative to liabilities, net worth $($Click to select$)vv,($Click to select$)vv$ leverage and prompting further asset $($Click to select$)vv,$ potentially destabilizing those markets.