The pressure on banks to deleverage and, in the years leading up to the crisis, the growing importance of types of financing that can be sold on the market may have impaired the ability and incentives for banks to analyze the prospects of the various business sectors and carefully assess borrowers’ creditworthiness.
2 One associate from the San Francisco Federal Reserve Bank recounts a meeting at the height of the crisis when staff suggested their exhausted boss should take a break from the round-the-clock emergency meetings. Then-President Yellen stated that she had an obligation to continue working until such time that families were no longer losing their homes, their livelihoods, and their pensions.