| From 2002-2005, Fed Chairman Alan Greenspan kept banks' own borrowing rates lower than the rate of inflation-so for bankers, money was free. Bankers also began to package their loans into new types of bonds they could sell off to pension funds and other investors to free up their capital for more lending. When money is free, and banks can earn rich lending fees without tying up capital, rational bankers will lend to infinity. |
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