find a study here
http://www.federalreserve.gov/faqs/banking_12625.htm
there was a deregulation of investment banks which
1) allowed them to reduce their reserves and
2) allowed them to use their own risk scores instead of being subject to regulatory agency risk scores
this was after repeal of glass-steagel
On April 28, 2004, in a fitting and perhaps flagrant final act of eviscerating prudent regulation, the SEC ruled that investment banks may essentially determine their own net capital. The insanity of that allowance is only surpassed by the fact that the SEC allowed the change because it was simultaneously demanding greater scrutiny of the books and records of what were the holding companies of investment banks and all their affiliates.
The tragedy is that the SEC never used its new powers to examine the banks. The idea was that Consolidated Supervised Entities (CSEs) could use internal models to determine risk and compliance with net capital requirements. In reality, what the investment banks did was essentially re-cast hybrid capital instruments, subordinated debt, deferred tax returns and securities with no ready market into "healthy" capital assets against which they reduced reserve requirements for net capital calculations and increased their leverage to as much as 30:1.
What was more likely to precipitate a brand new crisis in the 2008? activities which were in place for 10-30 years or a change that happened within the last few years? Obviously is wasn't Clinton era anything....it was the continuous tearing down of regulations which reached a tipping point
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