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Can you explain how the recession was caused by "government's choice of credit worthiness metrics", instead of rollbacks of regulation?
by velp 8y ago
Can you explain how the recession was caused by "government's choice of credit worthiness metrics", instead of rollbacks of regulation?
- kolbe 8y agoI'm not sure why you think these things are mutually exclusive. And as far as Goodhart's Law is concerned in this case, they're intertwined concepts. The government's choice to allow securities rated by S&P/Moody's to be treated as gospel allowed/encouraged banks, insurance companies, GSE's and pension funds to take far more risk than was systemically reasonable.