Mark Jickling, at CRS:

The current financial crisis began in August 2007, when financial stability replaced inflation as the Federal Reserve’s chief concern. The roots of the crisis go back much further, and there are various views on the fundamental causes.

It is generally accepted that credit standards in US mortgage lending were relaxed in the early 2000s, and that rising rates of delinquency and foreclosures delivered a sharp shock to a range of US financial institutions. Beyond that point of agreement, however, there are many questions that will be debated by policymakers and academics for decades.

While some may insist that there is a single cause, and thus a simple remedy, the sheer number of causal factors that have been identified tends to suggest that the current financial situation is not yet fully understood in its full complexity. This report consists of a table that summarizes very briefly some of the arguments for particular causes, presents equally brief rejoinders, and includes a reference or two for further reading.

From the archive, Niall Ferguson:

This crisis is about much more than just the stock market. It needs to be understood as a fundamental breakdown of the entire financial system.

We shall now have to question some of our most deeply rooted assumptions -- not only about the benefits of paper money but also about the rationale of the property-owning democracy itself.

From the archive, Nassim Nicholas Taleb:

Many hedge fund managers are just picking up pennies in front of a steamroller. And sometimes the steamroller accelerates.

Causes of the Financial Crisis