Yandle cites the importance of trust in financial transactions and cites three "assurance mechanisms" -- credit ratings, international accounting standards, and credit-default swaps. All three collapsed when easy credit and policy makers' push to make housing more widely available combined in the crazy ways that we now read and talk about on a daily basis.
But the author's focus on how the three assurance mechanisms were overwhelmed by policy errors (well documented by the Yandle) is informative and eye-opening.
Markets expanded when trust was formed, and they collapsed when the politically distorted assurance devices failed to function. In the process, government, the lender of last resort, also became the owner of last resort.
Read it in print or when it comes online.
Here it is. Silly me.