Lenders overconfident in their ability to manage risk
With house prices rising steadily loan default rates fell, and lenders—overweighting recent events, looking at other people lending, and mindful of their immediate financial and competitive incentives—concluded that it was safe to continue lending.
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The Global Financial Crisis »The Global Financial Crisis
Long-term causes of the financial crisis? »Long-term causes of the financial crisis?
Human cognitive biases »Human cognitive biases
Lenders overconfident in their ability to manage risk
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