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There are several “narratives” attempting to put the causes of the brand new drama to the framework, which have overlapping aspects. Borrowing from the bank extension mainly gained the real property business, making almost every other energetic parts of the new savings underfunded. In some instances, these businesses also sustained personal debt to finance this type of financial techniques, subsequent diverting tips out of productive groups. At the same time, of numerous low-monetary organizations prioritized stock buybacks, dividend repayments, and you can speculative investments more than reinvesting in the effective financing and you may increasing a job. The brand new unregulated production and you can trade of derivatives, along with too much leverage and misplaced confidence from the housing marketplace, were similarly tall members.
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