Frankly, I do not buy this. Quite a few large banks made very few or no subprime loans. I would cite JPMorgan Chase, Wells Fargo, and US Bank.
So if they could refrain, what about everyone else? It was not regulation, but greed and fraud, that led Citi, WaMu, and Golden West to make these loans. Just as long as they thought they were reaping huge profits, they were happy to do it.
I just listened to an interview of Peter Schweizer who is the author of this book: Architects of Ruin.
I recommend reading this based on what I heard him discussing.
Anyone here read this one yet, care to add in?
Agreed, there was no one single cause to the financial crisis - there were many. I think there was one underlying factor, thought - a belief that systemic risk was a thing of the past. So mortgages were made to people with limited ability to pay, leverage was increased, and deriviates created with no regard for the risk those were piling into the system.