The crisis was caused by bubble thinking the overall view that US and other property prices wouldn ' t significantly drop , by lax regulations , by lack of understanding of certain complex financial instruments , by cosy relationships between certain banks and rating agencies , by stress tests that failed to take into account a full systemic crisis , undercapitalised and overleveraged institutions . These are not crimes as such , more are related to industry negligence and oversightHowever in the Icelandic banking industry , actual crimes took place fraud , laundering , etc and people were sent to jail Those crimes didn ' t take place elsewhere in the world in any significant amount and generally weren ' t the cause of the crisis contrary to populist myths on the matter