Movie Guy asks in comments:
I would prefer to read the risk assessment viewpoints of bankers and underwriters as they understand that subject matter far better than most. That’s the best starting point in my opinion. Whether their models were wrong or were simply ignored internally or by regulators is a question that hasn’t been adequately answered thus far.
I haven’t seen an active discussion of loan risk assessment models and actual display or links to existing risk assessment models on any key econ or financial blogs. If you have, please cite a few examples.
Once the smoke clears from the credit crisis, it will be interesting to learn whether economists, bankers, underwriters, and/or financial analysts were the driving force that caused bad investment and loan decisions. If existing U.S. trade policy is a related example, it’s possible that some economists – inhouse and Fed – made some bad predictions which, in turn, helped lead to the overall global credit crisis. In essence, I am saying that economists at various levels played active roles in the financial credit crisis. Thus far, I haven’t seen much noteworthy commentary on this matter, and certainly very little from U.S. economists or the econ blog community.
Are we to assume that banking and investment economists including those serving the investment houses, and Fed economists were ignored? I seriously doubt that was the case. So, where is that discussion?