Why did the financial crisis of 2008 happen?
Shows causes on the record, then each account's causes side by side.
Not a single settled cause.
A connection is not evidence of wrongdoing.
Each account
A to Z, none ranked above another.
Named in 2 of the 2 accounts recorded here: Issuer-pays model
According to Financial Crisis Inquiry Commission
-
Issuer-pays model
led to
Primary record
1
In two steps: the commission concludes the pay model undermined the ratings, and that the crisis could not have happened without the agencies.
- Mortgage-backed security caused Primary record 1
According to Senate Permanent Subcommittee on Investigations
-
Issuer-pays model
led to
Primary record
2
One significant cause was the inherent conflict of interest arising from the system used to pay for credit ratings.
In two steps: the report calls the conflict one significant cause of the inaccurate ratings, and says the inaccurate ratings were a key cause of the crisis.
Proof 2 sources
-
The Financial Crisis Inquiry Report (final report incl. dissenting statements), Financial Crisis Inquiry Commission.
Primary record
The business model under which firms issuing securities paid for their ratings seriously undermined the quality and integrity of those ratings
This crisis could not have happened without the rating agencies.
We conclude collapsing mortgage-lending standards and the mortgage securitization pipeline lit and spread the flame of contagion and crisis.
-
Wall Street and the Financial Crisis: Anatomy of a Financial Collapse (majority and minority staff report), Senate Permanent Subcommittee on Investigations, 13 Apr 2011.
Primary record
Archived copy
One significant cause was the inherent conflict of interest arising from the system used to pay for credit ratings.
Inaccurate AAA credit ratings introduced risk into the U.S. financial system and constituted a key cause of the financial crisis.
How this answer is built
Lines on the record come first: sourced links that no one presents as their own account, each with its strongest source. Then every account recorded here gets its own column, A to Z, none ranked above another. A column quotes only that account's own words and shows the strength of its own sources. Disputed lines are listed apart, with the reason, and lines still being verified come last. Neither is counted. Withdrawn lines are never shown.
When a list is longer than the page shows, the links the public methodology ranks strongest stay (methodology 0.3), and the rest open in the explorer.
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