Economics, 3rd Edition

Lessons Learned?

The Organization for Economic Cooperation and Development (OECD) trace the development of the 

 financial crisis through a series of four main stages.

1. 

A drive on the part of politicians to widen access to home ownership to the poor. Changes to  regulations 

to facilitate this drive led to a growth in lending that was not prudent. This political impetus was evident 

through successive US Presidents from Clinton onwards and in the UK via New Labour. As a result 

the expansion of sub-prime lending in the US and cases of banks in the UK lending at 125 per cent 

of the value of homes, wider access to credit cards and the build-up of debt and limited background 

checks for credit worthiness were not acted upon by regulators with sufficient vigour.