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Spence you're not listening.
Sub prime and CRA were the beginnings of the dumbing down of lending standards that contributed to this mess.
If you include everything done in the name of AFFORDABLE HOUSING policies, you would see how we got here.
Sub prime got the ball rolling for reduced down payment or no down payment loans, and reduced documentation loans, ALL of which were government creations in the wake of CRA.
CRA created moral hazard. If the federal government could force banks to lend to deadbeats and then GUARANTEE subprime loans, then why couldn't EVERYONE ELSE get hust as good of a deal?
Sub prime issuance was small relative to other products, but sub prime failures via the failure of two Bear Stearns hedge funds were the catalysts for the credit crisis.
Posted from my iPhone/Mobile device
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