Different approaches to the causes and consequences of the financial crisis

Unquestionably the behavior of the financial institutes caused the US financial crisis which became a worldwide phenomenon. It is too easy but not enough to blame greedy banker (though not superfluous). The subprime crisis was the consequence of the profit-seeking activity of the different financial institutions (which belongs to the logic of the market). What happened was not against the market but according to the logic of the market. There were some mistakes in functioning of the market institution which must be corrected. These distortions were caused mainly by the intervention of the states. Competitiveness in the sector was confused by the belief that some big institutions will be saved by the state because they are too big to fail. (And at the end they were not disappointed, that was what happened.) According to Raghuram Rajan the fault lines causing the crises lay in the income situation of the society and in the government interventions. According to him too much state in business should be reduced. Financial institutions should take the responsibility of their activity, state should not rescue them, and probably only the very small institutions should have even deposit insurance. The customers of the financial institutions should learn to make differences between correct and too much risk-taking institutions. Another famous American expert, Richard Portes doesn’t share his views about too much state. He says the deregulation process which started in the early seventies has the main responsibility. There is much more state regulation necessary within and between states, maybe not in the midst of the crises but soon afterwards. Both scientists agree that the remuneration system of the financial sector employees should be changed and bound to the long term effect of their activity.