Reagan and Bush senior didn’t want to openly increase the bu…

Reagan and Bush senior didn’t want to openly increase the budget deficit, so they used forbearance to keep failed banks open. Bush II also had to prop up failed banks when the markets began to collapse in 2007 and the problems accelerated in 2008. What tools did he use?

A spike in interest rates ignited the S&L industry’s trouble…

A spike in interest rates ignited the S&L industry’s troubles, which were fanned into a bad-asset problem with easy credit, including an increase in the deposit insurance limit, FSLIC notes and other forbearance, junk bonds and brokered deposits (a.k.a. hot money.) What was the main source of easy credit in the mortgage crisis besides the SEC’s decision to allow Wall Street investment firms to hold less capital as a cushion against potential losses on money they borrowed?