Were Sub-prime mortgages to blame for the banking crisis or have the banks singled out one 'player' to protect the management from further scrutinization?

   The reason which has been credited with being the cause which began the banking crisis was what is known as Sub-prime mortgages which originated in the United States. These are the lending of mortgagaes to less than wealthy home buyers. Lending money to home buyers is one of the purposes that people would associate with banking, and a purpose that would be an acceptable use of invested money. It may also be a socially acceptable excuse if this really was the main cause of the banking crisis.
   Using this as an excuse seems rather convenient as many other 'types of business' banks are lending money to would seem less socially acceptable. Also at the time when the banking crisis surfaced, the main priority, and understandably so would be to prevent people withdrawing their investments and creating termoil in the stock markets. For this a sacrifice would be worthwhile, and if you could put part of the blame on home buyers who they took pity on, not being wealthy enough, then all the better.
   The fact is that in the United States much of this money was actually paying for new homes. Employment was being created while they were being built. This would have spread wealth. In fact building homes is the last thing that would cause a banking crisis or recession. In comparison to the U.K.,the U.S. was building more homes in relation to the number of mortgages. What was happening in the housing market in the U.S. was far more sustainable than what was happening in the U.K. In the U.K. a larger proportion of morgages were for older homes. Lending to buy ready built homes is less economically sustainable than lending for new homes as there is no employment generated on the purchase of an existing home. In short, mortgages alone would be more likely to have caused economic problems in the U.K. than the U.S. Many of the U.S. home buyers did not have high incomes and so may have been paying a higher interest rate to cover the increased risk. It would seem though unfair that these people should be paying higher interest rates for increased risk when the banks were actually increasing the risks of default themselves through other areas of 'business' they had been (and still are) involved in, which have had major implications on the economy. These are Private Equity, Stock Markets, Hedge Funds & 'Property tycoons'. Most of the home owners who lost their homes in the U.S. could be still paying their mortgages today if it wasn't for these economy under mining investments by the banks. These investments caused inflation, job losses and business closures. The U.S. government reacted by increasing interest rates. This then lead to the inevitable house reposessions and collapse of the housing market. We therefore believe the sub prime domino was one that was pushed by a number of others which the banks will have less willingness to explain.
 (See other Anti-Crisis articles on Private Equity, Stock Markets, Hedge funds & Property Portfolios).