Prior to the current pandemic, the Financial Crisis of 2007 – 2009 was the worst economic downturn since the Great Depression of the 1930’s, and like that event had global repercussions and consequences. Also like the earlier crisis there were significant events that were under the control of policy makers that made the 2008 crisis worse. Among these were lax banking regulations on home loans, a loosening of regulations that had prevented commercial banks from engaging in speculative behavior more typically reserved for investment banks and hedge funds (see also: The London Whale). Please contribute to our discussion this week by writing on ‘whether the crisis could have been prevented or significantly mitigated by better bank supervision’.
