Thoughts On 2008 Market Crash

While many blamed both corrupt employees of the financial industry and government officials responsible for regulation, I personally blame the 2008 real estate market crash on the rating agencies. The system of rating agencies is fundamentally flawed, as companies are always more likely to give their business to agencies that inflate grades for their bonds. This was the real root of the crisis as these incorrect rating lead to investors buying “falsely advertised” CDOs from the banks. Regulation, or a greater level of self-regulation, of  the rating agencies would have prevented the crisis.