Arnold Kling  

What Did the Regulators Know, and When?

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Paul Krugman asks a Question... Scott Sumner on the Multiplier...

I say Plenty, and long before most people had heard of CDS, CDO, or SIV.


a review of the history of the past few decades shows that regulators were aware of these innovations. They approved of these innovations. They collaborated with banks in constructing these innovations. And they applied pressure and provided incentives to banks to use these innovations.


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COMMENTS (3 to date)
doug bennett writes:

Did you mean low down payments instead of loan in "First, we need to recognize that mortgages with loan down payments are not the solution for affordable housing ?

Arnold Kling writes:

Doug, I sure did.

fundamentalist writes:

The evidence is clear: regulators weren't asleep at the wheel, paid off by someone, or stupid. They did their jobs according to the regs. The problem was the mainstream (Krugman) economics behind the regs and guiding the regulators.

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