Chairman John Reid has defended Celtic's spending policy and says the board - not the bank - will always decide which players to buy and sell.
Reid told Celtic's annual meeting that excessive debt was the road to ruin for a football club.
"Just look around you. Look what happens when you don't have financial stability," Reid told shareholders.
"People who decide who to buy and sell here are club directors - not directors of a bank."
Celtic lead the Scottish Premier League by a point ahead of Old Firm rivals Rangers.
And manager Tony Mowbray has said he is keen to bolster his squad in the January transfer window but admits the increasing financial strength of English football means he may have to go as far as South America to replenish his Celtic squad.
"We are actively pursuing all parts of the world at the moment, including South America, where some players have European passports," said Mowbray, who was attending his first agm as Celtic manager.
it's not an act of character, courage or leadership to get into debt - it's an act of moral cowardice.
Celtic chairman Dr John Reid
"I am trying to expand the scouting system that is in place.
"Within the last 10 years or so, this club took a lot of players from the English Premier League.
"But I think that market is getting further and further away because of monetary reasons.
"So the market places are elsewhere - Europe, South America and different parts of the world.
"But you don't ever complete your jigsaw, you are always looking to improve."
Rangers, who are about £25m in debt, are seeking a new owner and have come under pressure from Lloyds Banking Group to bring their costs under control.
Some Celtic supporters have voiced frustration over their own club's transfer policy, but Reid's comments appear to have dashed hopes of going into debt in order to finance squad rebuilding.
''The reality is we made a profit of £2m last year - and reinvested it in the team," said Reid. "We spent eight million in the summer.
''But it's not an act of character, courage or leadership to get into debt - it's an act of moral cowardice.''
Dr Reid, who was re-elected as chairman by Friday's meeting, also insisted that the club are in a period of transition and frustration after the departure of Gordon Strachan.
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