During the Albert Hirschman Lecture at Lacea Lames 2012, Eric Maskin, Nobel Prize winner assured that 2007 financial crisis was generated mainly by banking leverage in United State´s credit market, which generated externalities that affected the whole system.
Maskin emphasized on the importance of credits for the economy. However he recognized that in the credit market problems tend to be amplified and these do not usually self-regulate.
As an example, he referred to the subprime market, as the generator of 2007 crisis, which dragged the whole credit market, forcing the US government to make a bailout.
You can watch Maskin´s lecture
here.Watch an special interview with Eric Maskin
here.
