The regulatory capture theory suggests that the way banks and government officials looked after each other led to the financial crisis in 2008.

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Regulatory capture theory suggests that regulatory agencies tasked with overseeing industries can become "captured" or influenced by the very industries they are supposed to regulate. In the case of the financial crisis in 2008, this theory suggests that regulatory agencies, such as the Securities and Exchange Commission, became too friendly with banks and other financial institutions, ultimately leading to a lack of oversight and accountability that contributed to the crisis.

The Regulatory Capture Theory Suggests That the Way Banks and Government