The microeconomic causes highlighted in the literature are the excessive credit growth and associated leverages, the lowering of credit standards, rapid financial innovations without adequate regulation, inadequate corporate governance, inappropriate incentive structure in the financial sector and overall lax oversight of the financial system.
BIS central bankers’ speeches  1  Global imbalances It is argued that while the subprime problem was the trigger, the root cause of the crisis lies in the persistence of the global imbalances (BIS, 2009).