This was one of the root causes but there were many. You should take a step back and really understand what happened. In fact fruit pickers weren't the problem at all. They never applied for those loans and the ones that did were in the minority. No, what you had were a bunch of middle-class people with houses buying up investment property to secure their future.
The condo I used to live in (in Miami) had a 50% occupation rate and it wasn't occupied by fruit pickers. Instead you had doctors, lawyers, and even hackers looking for a 2nd or 3rd or 4th home to rent out. And they all had good credit.
Everyone likes to think it was poor people buying up McMansions (and I don't doubt there were some) but the mortgage crisis was caused by normal people who were way over leveraged and a Fed that let it continue until it collapsed. This
My point is that the rules and regulation around mortgage lenders and lending were lax to the point of non-existence and that penalising banks (most of whom didn't originate these mortgages in the first place) is just easy scape goating and is exacerbating the very issues it's trying to solve.
We agree then.
Capital ratios can be helpful too in some circumstances. I'd consider tighter regulation of the loan industry as financial regulation, but I don't really care about the semantics.
> Countries with stronger financial regulations didn't have to bail out banks in 2008/09.
That's because other countries didn't have retail banks or mortgage brokers dishing out 700k mortgages to fruit pickers on 14k. _This_ was the root cause of the banking crisis and this is the industry which needed tightened regulations (such as those seen in the UK or most European countries). Inventing punitive rules on banks' capital ratios and funding reserves etc doesn't help anyone or address the root cause of the 2008 implosion.