perth based quant and algorithmic traders, page-69

GFC come about by irresponsible fiscal and monetary US policies. Low interest rates resulting in cheap debt, resulting in asset over appreciation. Tax cuts and to much government spending resulting in even more cash in the economy, resulting in asset over appreciation.

With so much cheap credit available banks sold the retail debt with no safe guards for shorterm gains resulting in asset over appreciation, finally resulting in the crash of the real estate market. The sub prime didn't cause the GFC(some would disagree). The sub prime was the weakest link and collapsed first, followed by the prime market.

Banks collapsed because of the over exposure to the over appreciated real-estate market that finally collapsed.

These institutions didn't collapse because of the type of trading activity going on with their share prices. They collapsed because they were fundamentally bankrupt. Hence why the government injected so much cash back into them.