The Nyberg report is all over the papers/radio/TV, it is (meant to be) blowing the lid open on the causes and participants in our great property crash, but I don’t know if there is much in the way of ‘new material’ in it, why?
Because in 2009 CentralBanking.com (a publishing house) published a book called ‘Towards a new framework for financial stability’, the authors were all central bankers, economists, regulators and a few practitioners; all said almost 60 authors took part.
In the very first chapter they outline the broad consensus on the causes of the crash, which they say are as follows:
1. A worldwide liquidity glut (too much money floating around) which drove a search for yield and encouraged leverage
2. Errors of monetary policy (rates being too low in early 2000’s)
3. Structural shifts in the financial system & certain innovations (ABS’s/MBS’s/CDO’s)
4. Non bank intermediation (sub-prime lenders)
5. Lower margins (eg: trackers!)
6. Reliance on interbank funding (Ireland Inc.)
7. Deficiencies in Regulation
8. Separation of jurisdiction between Central Banks and Regulators (Ireland 2003, and since re-merged)
9. Concentration on property lending.
10. Inappropriate compensation schemes in banks.
11. Bad banking governance.
You can buy this book for £150 so why did we just blow €1,000,000 for the same thing?