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The paper argues that the crisis was caused by four basic factors: a long period of economic growth, low interest rates, financial innovations, and regulatory and accounting incentives to use securitization with high maturity mismatches. The combination of these four factors has led to an increased search for high-yield low-default securities, and has led to an underestimation of the value-at-risk because no data was available for new financial products, and because the creators and the buyers of new financial products put too much faith into the blessing of credit rating agencies.
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