Deregulation of thrifts directly seeded the 2008 global financial crisis.

Evidence

The 1980s saw the savings and loan crisis following its deregulation during the Reagan administration. Among the changes in the savings and loan, or thrift industry, deposits toward the purchase of a home could now be used for risky loans, resulting in unsafe commercial investments, fraudulent insider transactions, and corruption. Over half of the thrifts failed. Taxpayers ended up footing a bill of $3.5 billion dollars. The slowdown in the financial and real-estate markets contributed to the economic recession of the early 1990s. This was the origin of mortgage securities that, in a more complex form, spawned the global economic crisis and recession a decade later. — Albert Bandura, Moral Disengagement, 1406

Categorization

• XREF: Connects to the chain of financial deregulation that culminated in the 2008 crisis—parallel to economic history readings and arguments about how regulatory rollback enables harm.