| Summary/Abstract |
Almost as soon as the financial crisis struck in late 2007, policymakers began working to prevent another one. The roots [1] of the crisis, they contended, lay in reckless lending [2] and excess debt. Banks had made massive loans to “subprime” borrowers, who had little ability to repay them, and the banks funded these investments with borrowed money. When the U.S. housing bubble burst, millions of Americans defaulted on their mortgages, and the overleveraged banks collapsed. The government had to bail them out [3], and U.S. taxpayers picked up the bill.
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