reasons for the financial crisis

1. Banks neglected to maintain a sufficiently diversified portfolio.

2. The compensation systems for leading managers were far too much based on short-term performances.

3. The control system within banks failed.

4. Rating agencies financed by their customers grossly misjudged the values of firms and assets.

5. The measures by the US government to ease the buying of houses by relatively poor people proved to be mistaken.

6. American liability rules in case owners could not pay the interest on their mortgages encouraged too high levels of indebtedness.

7. The liability rules for gross mistakes by leading managers of business firms were too restricted.

8. The percentages of own capital required for banks by internationally agreed rules (Basle 2) and the valuation at market prices adhered to during the crisis exacerbated it.

9. The permission by Basle 2 for banks to employ their own models to evaluate risks was a mistake.

10.The control of financial institutions by government agencies failed.

11.The lack of knowledge of economic history by leading managers encouraged them to take overly risky decisions.