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by MrBuddyCasino·11y ago·view on hn ↗
The banking crisis was a result of de-regulation, caused by neo-liberal government agendas. After the great depression, the banking sector was stable and only became problematic again when the laws that were introduced after the great depression started to be dismantled.

Are you saying thats not what happened?

2 comments
The US financial crisis happened in large part due to the monopoly of the "big three"[1] credit ratings agencies mislabeling bad debt as good. These agencies had a corner on the credit ratings market thanks to the US federal gov't (SEC) bestowing them with the coveted "Nationally Recognized Statistical Rating Organization" (NRSRO)[2] status, a status which only those three companies held between the mid-1990s until early 2003, firmly cementing them in the financial industry as the chosen ones for credit ratings. The US gov't also gave some extra protection to NRSRO-rated debt, e.g. by recognizing it as legal investments.[3]

So in this case, over-regulation and the monopoly it bred had quite a large hand in the financial crisis.

[1]: http://en.wikipedia.org/wiki/Big_Three_(credit_rating_agenci...

[2]: http://en.wikipedia.org/wiki/Nationally_recognized_statistic...

[3]: http://en.wikipedia.org/wiki/Nationally_recognized_statistic...

Yes, I'm saying that's not what happened. The banks were forced by the government to make bad loans, to such an extent the government had to buy up 90% of the paper.