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The Role Of Lobbyists In Sub-Prime

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We focus on the US—not because lobbying does not exist in other nations—but because US transparency laws provide the level of detail on political spending and lobbying needed to do such an analysis.


Did anti-regulation lobbying fuel the subprime crisis? This column shows that there is a strong relationship between financial industry lobbying and favourable financial regulation legislation. It argues that the financial industry fought, and defeated, measures that might have curbed some of the reckless lending practices that many think played a pivotal role in igniting the crisis.

In fact, banks continued to lobby intensively against tighter regulation and financial regulatory reform even as the industry struggled financially and suffered from negative publicity regarding its role in the economic crisis (Labaton 2009).

As these anecdotes suggest, regulatory failure, in which the political influence of the financial industry played a part, may have contributed to the 2007 meltdown in the US mortgage market, which, by the fall of 2008, had escalated from a localised US crisis to become the worst spell of global financial instability since the Great Depression of the 1930s.

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  • 333 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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