Deregulation of the banking industry
Deregulation allowed savings and loans to pursue riskier investments than they had before. Coupled with this is that Reagan's budget cutting measures also reduced staffing at the Federal Home Loan Bank Board, which was responsible for regulations that were in place.
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If it helps, this is what *did* happen to them,
they were made into client states of the soviet union (now referred to as the USSR) and turned into communist semi autonomous states
Japan's invasion of China began World War II in the Pacific region.
