> Bankers do not intend to increase risk without safety backups. In the financial crisis banks were incompetent just as much as unethical -- they had risk model

> Bankers do not intend to increase risk without safety backups. In the financial crisis banks were incompetent just as much as unethical -- they had risk models that told them they had a safety net, but their models were wrong I agree that what you describe covers most bankers. But you only need one person to come up with something like a CDO secured by credit default swaps. And you only need one person at the top of one of the biggest banks to promote this strategy. Then everybody else needs to follow suit, because profit is not just the source of their bonusses, it's also their protection against predatory competitors. So the number of people who need to start this is quite small, and I still claim that these few people knew exactly what they got us into, and they also knew that they could get away with it. > in theory offered social benefit: decreasing cost of housing without increasing risk. That is a foolish idea. The only way you can reduce your own risk is by putting the risk on other people's shoulders. You cannot make risk go away. > The rise of ETFs has enabled average investors to invest with very low fees Yes, but google what ETFs will mean at some point for the economy? Normal value creation becomes less and less fruitful. So in the end the whole market goes down and again the small time investors will lose while the big whales get bail outs and eat the smaller fish in the sea. Also just because the fees in passive management are lower doesn't mean they can't be higher compared to the provided value. McDonalds is cheaper than a really good burger with really good fries, but you also get machine produced blurb in exchange, and in the end McD probably makes a bigger profit than your average, family owned burger shop.