Australian view of the US financial crisis

Chris Joye argues that the origins of the US mess was the crimped banking system that prevented the emergence of nation-side deposit taking institutions.

Note: the crimping clearly was a result of government intervention. I recommend Joye's article below.
http://economics.com.au/?p=2735

Joye writes:

"Trouble nevertheless arises when you create artificially strong incentives, as US governments repeatedly did, to predicate your entire housing finance edifice on securitised forms of funding to the detriment of the traditional deposit-taking market. Over and above stunting the growth of a nationally-integrated banking sector, synthetic incentives that instill securitisation as the preferred source of funding expose the overall financial system to a number of potentially destabilising conflicts. The most obvious of these is that the organisations that source new home loans and which are responsible for assessing their credit risk are removed from the institutions that ultimately own the assets and hence bear that risk. We have, therefore, a classic principal-agent problem."

A wonderfully accessible analysis.

http://www.businessspectator.com.au/bs.nsf/Article/Joye-$pd20090226-PM69X?OpenDocument&src=sph