The Financial Crisis: Causes, Recollections and the Aftermath
October 12, 2016
Through his experience as a former official with the Office of Thrift Supervision, C.K. Lee talks about the financial crisis:
The Financial Crisis of 2007-2009, and the aftermath, is the defining moment of my career in banking. Having served in government for 17 years, 10 of those in the bank regulatory arena, I managed to be present at some interesting places leading up to the events of 2007-2009, and served on the front lines of the recovery effort thereafter. Those experiences gave me insight into how federal policy affects financial markets, the private sector's recovery capabilities and the consequences of government responses.
The Role of Government. The federal government set the stage for the crisis -- not through a "lack of regulation," as Hollywood and political lore would have you believe -- but through affirmative policies that created an extraordinary housing bubble based on an unprecedented political and economic consensus.
Before 2007, two facts were widely accepted both in the financial arena and in virtually every household in America: every single American should be able to own a home. The idea had credence since home mortgages were less risky than other financial assets. On these two bedrock assumptions were built political consensus, public goodwill, financial consensus, companies, empires, fortunes and economic growth.
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