Ten years ago, funds allocated from the U. S. Treasury for the Troubled Assets Relief Program flowed to banks to keep them afloat.
Wave upon wave of fraud became so rampant among bankers, they gradually and then completely lost confidence in each other. They also – rightly – lost confidence in their assets. The collapse we saw resulted from bankers making a run on each other’s institutions. In the situation they had created, panic was a rational response.