Regulators make investing riskier

THE FINANCIAL SHORTING AUTHORITY

The crash of 2008 was unique. It was not triggered by a war, a shortage of raw materials, a famine or indeed any external factors.

It was caused by a massive expansion of credit that was condoned by regulators and the authorities. Although some fraud was committed, the majority of the problems arose from activities that were legal and fully permitted by the regulators. Selling mortgages to people who clearly had no ability, or even intention, of repaying them was allowed. Banks that were already trading on low levels of capital adequacy were permitted to buy other banks. No regulator seems to have questioned or prevented these or many other activities that at the time seemed odd to many. Even Warren Buffet cla...