The Real Cost of the 2008 Financial Crisis
Just a personal observation &#x2F; data point as a lot of folks everywhere are saying &quot;put bankers in prison&quot; any time they recall 2008 crisis. This is from the US, no idea how things played out in other countries:<p>Government shares a significant portion of the blame for this crisis. It required raising affordability of homes (i.e., loans) for lower income families. They might as well legislate away entropy, friction or gravity. Banks cannot lower home selling prices, so instead they had to become &quot;creative&quot; with loans, for example lend at 0% for the first 5 years. And lend more than today&#x27;s purchase price (creating strong demand for inflated assessments) so some of that extra cash can be used to pay mortgage for a few years. Five years later the music stops unless you can refinance again and kick that can down the road.<p>This insane game of musical chairs, where banks generate toxic loans, securitize them and throw them at someone else, had to end in tears. Everyone understood this. But faced with the regulation to raise affordability, what exactly should the lenders have done? They <i>HAD</i> to use at least X% of new loans to low income families.<p>Sadly, this is yet another case of good intentions (helping lower income families) implemented as a clumsy regulation that ends up hurting people you wanted to help. My 2c.