The claim asserts a causal link between regulators' and politicians' failures (inaction, deregulation, insufficient oversight) and the banking industry's excesses that led to the 2008 financial crisis. This is strongly supported by two major official inquiries. The US Financial Crisis Inquiry Commission (FCIC, January 2011) — a congressionally mandated commission — explicitly concluded that "widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets." It found regulators "had ample power in many arenas and they chose not to use it," citing specific examples: the SEC could have required more capital at investment banks but did not; the Federal Reserve could have clamped down on excesses at Citigroup but did not; and policymakers could have halted runaway mortgage securitization but did not. The FCIC attributed 30+ years of deregulation championed by Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry. The FCIC concluded the crisis "was the result of human action and inaction" and was "avoidable." The UK Parliamentary Commission on Banking Standards (2013) found that "regulatory failure [was the] supporting mechanism that allowed" the prudential and conduct failings (testimony from Lord Turner, former FSA chairman). It identified "counter-productive instincts in regulators" and "a political culture which reinforced those instincts" as underlying causes. It noted that politicians were "dazzled" by the economic growth and tax revenues from a booming financial sector, which "encouraged excess and undermined regulators." Regulators were also found to be "complicit" in banks outsourcing compliance responsibility. The causal mechanism is clear and well-documented: regulators had authority but chose not to exercise it (or were ideologically disinclined to), politicians supported deregulation and were swayed by the financial industry's lobbying ($2.7 billion in US lobbying, 1999–2008) and by the appeal of tax revenues from a booming sector. Official inquiries on both sides of the Atlantic independently reached the same conclusion. The inquiries identified specific counterfactuals (regulators could have set mortgage-lending standards, required more capital, halted risky practices) and found they did not act, establishing a causal rather than merely associational link. The FCIC explicitly stated the crisis was avoidable and that regulators and policymakers could have acted but did not. Sources: - Financial Crisis Inquiry Commission Final Report (https://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_conclusions.pdf) - BBC News reporting on FCIC report (https://www.bbc.com/news/business-12297002) - UK Parliamentary Commission on Banking Standards, "Changing Banking for Good" (https://publications.parliament.uk/pa/jt201314/jtselect/jtpcbs/27/2704.htm and https://publications.parliament.uk/pa/jt201314/jtselect/jtpcbs/27/27ii05.htm)