Re: Banksters hate being ripped off by other crooks.
I'm not entirely sure "lax regulation" is appropriate here. I don't know about the US, although I suspect it was similar, the situation in the UK is that it was, essentially, government policy.
We had central banking encouraged, by government to set interests rates to achieve inflation of around 2%. The statisticians were directed by government to use a measure of inflation that excluded housing costs. That was government policy. At the same time manufacturing was being off-shred to the lowest cost countries available. If there was any dumping going on that was ignores. If it caused unemployment in local manufacturing that was ignored. We had low inflation and cheap money; voters like those and governments like voters to like what's happening. Voters even liked the idea that the alleged values of their houses was rising and that they could take out more cheap loans against those inflated values.
But all that cheap money went into soaring house prices. Even when house prices and, with them, rents were at clearly unsustainable levels of inflation there was no feedback mechanism in place because they weren't in the figure used to determine interest rates. The situation was flagrantly ignored and that resulted in the toxic debts. Actually I suspect it wasn't totally ignored. I've always suspected that Blair realised it couldn't end well, rode the resulting popularity while it lasted and stood aside in favour of his Chancellor (Finance Minister) just in time for the latter to become PM and face the consequences of his policies. Although, of course, the rest of us also had to face those consequences.