Quote Originally Posted by Fragony View Post
banks don't like giving loans to people who can't pay them back.
Banks don't care if their clients are solent as long as the collateral keeps rising in value. They also don't care if they can find ways to shuffle the risk of non-payment to other parties.

Why some people think that deregulation will invariably give better results is beyond me. Does anybody here seriously think that in the absence of a state, laws and financial oversight we'd have stock exchanges, or even universally accepted currencies?

Actually, I agree that politicians are largely to blame - but for the reason that they pushed deregulation as some sort of panacea. That bankers and other businessmen will cynically exploit the resulting gaps and loops is to be expected and being morally indignant when they do so is pointless. It's the governments job to provide the framework that discourages housing bubbles, ponzi schemes and other unsustainable practices.