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PNC Financial Services Group Investment Banking Summer Analyst Interview Question (student candidate)

I interviewed in Pittsburgh, PA and was asked:
"Explain your understanding of the 2007-08 financial crisis. What were the key factors at play and what do you think could have been done to avoid it?"
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Part of a Investment Banking Summer Analyst Interview Review - one of 552 PNC Financial Services Group Interview Reviews

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I talked a bit about how mortgage defaults and ambiguities in the structuring of synthetic CDOs caused concern about the value of collateral used for repo transactions which led to higher haircuts and created a liquidity death spiral... I think he liked that I used the phrase liquidity death spiral. For the second part I kind of copped out and said something about hindsight bias and if the smartest people in the world didn't foresee a systemic meltdown of the financial industry there probably was no way to avoid it.

- Interview Candidate on Oct 7, 2013

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