Moreover, it has brought to the fore the increased interaction between market liquidity and funding liquidity of individual institutions. Indeed, the trend among large global banks has been towards greater reliance on wholesale market sources of funding.
Meanwhile investment banks took the MBAs off their balance sheets so that they could leverage once more and repeat the cycle of sub-prime lending. At one level, it is possible to argue that nobody in the entire chain did anything legally wrong. But that is too simplistic an argument. We do not govern our behaviour simply by what is allowed by law or regulation.