10 years after the subprime crisis, have things really changed?

IT HAS been 10 years since the start of the US subprime mortgage crisis - which for some unknown reason is now referred to as the Great Financial Crisis but we prefer to call it by its correct name. On the face of it, there have been many changes to the financial system to improve and strengthen it so as to prevent a repeat.

For example, the US in 2010 passed the Dodd-Frank Wall Street Reform and Consumer Protection Act that was aimed at bringing about sweeping reform of the financial landscape and ending the "too big to fail" refrain that was often heard in the immediate aftermath of the crisis. In essence, Dodd-Frank aimed to rein in irresponsible (actually, a better word is crooked) behaviour by US investment banks and offer consumers greater protection from financial predators.

In Singapore, financial institutions and brokers are no longer allowed to sell to gullible retail investors the opaque, complex and little-understood instruments such as Lehman Brothers' Minibonds and other similar "high-yield" certificates that Wall Street banks had cunningly crafted with plenty of smoke and mirrors to conceal the true nature of the underlying securities: that their cash flows were dependent on people with no proper credit ratings in the US - some of whom were possibly jobless - keeping up their mortgage payments.