My take on the subprime meltdown is the whole thing was driven by “greed”. Pure and simple human greed. The US Bond market was flush with cash and investors seeking a higher return. Mortgage companies moved into the subprime market more aggressively to take a bigger piece of the pie. Now could banking regulators have done more? Maybe, but I don’t know for certain. Maybe they could have. I guess that is why the second round of hearings is intended to uncover. Stay tuned.
Regulators to face more grilling over subprime loans – MarketWatch: “Regulators including FDIC Chairman Sheila Bair, Office of Thrift Supervision Director John Reich and National Credit Union Administration Chairman JoAnn Johnson are scheduled to testify before a House Financial Services subcommittee about the subprime mortgage market and predatory lending, and the effects of both on banks. “