Specific Analysis of Subprime Mortgage Crisis In its Declaration of the summit on financial markets and the World economy, dated 15 November 2008, leaders of the Group of 20 cited the following causes During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. Market Investing Exuberance) At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions. (Series of Regulatory Failure)Specific Analysis of Subprime Mortgage Crisis In its Declaration of the Summit on Financial Markets and the "Declaration of the Summit on Financial Markets and the World Economy," dated 15 November 2008, leaders of the Group of 20 cited the following causes: "Durin g p gg g ,g g p , a period of stron g global growth , growin g ca pital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence.(Market Investing Exuburance) At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system Policy vulnerabilities in the system. Policy -makers regulators and makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions."(Series of Regulatory Failure)