Many firms chose not to invest the necessary time and resources in thorough credit analysis and underwriting since someone else would be purchasing the mortgage. 2  BIS Review 115/2008  Investors did not perform their own due diligence. Instead, they relied on the due diligence of originators and packagers, who lacked interest in exercising this due diligence.
They also placed undue reliance on the judgments of the credit rating agencies, and the capacity of modern technology and diversification to manage financial risks. What can we draw from this?