I heard the government encouraged banks to give loans to people that otherwise would not have qualified for houses and so on. Investment bankers bought those, packaged them and sold them into the market. Then the people defaulted on their loans and everything collapsed like a house of cards.
But here are my questions. Why would the government encourage banks to give people loans more easily? What is the benefit to them if that is really true? And why would banks give loans so easily if they usually had these strict guidelines.
But here are my questions. Why would the government encourage banks to give people loans more easily? What is the benefit to them if that is really true? And why would banks give loans so easily if they usually had these strict guidelines.