It turns out its not that simple. The conditions that allowed the housing bubble to happen were not created overnight. And contrary to popular belief these are

It turns out its not that simple. The conditions that allowed the housing bubble to happen were not created overnight. And contrary to popular belief these are highly regulated entities. The truth is that many individuals in government were just as complicit as the MBS desks at banks. If a bank was prosecuted they would very rightly be able to point out that the GSEs and various agencies set a lot of the loan standards. You might be able to say something about material misrepresentation but a lot of firms buying securities based on these loans were asleep at the wheel. They were telling their investors that they were conducting extensive due diligence on these loans and they weren't really doing any. If you have ever picked up a derivative contract (I mean the dead tree type) its full of disclaimers and warranties. It is true that the buy-side has become much more engaged when evaluating new financial products. In the end most of the players were greedy. Politicians wanted to be elected and demanded "affordable housing" and the relaxation of loan standards. Individuals leveraged up and bought properties to make quick money. Investors around the world chased yield and created immense demand for securities. Banks are a flow business and loved the margins on this flow. Its certainly not as simple as lets go find someone and put them in jail.