Soleron said:
It is. The banks took on the risk when they made the mortgages - and have profited considerably up until now from doing so. Now that the risk actually becomes real losses, the government takes all responsibiloity away from the banks. The underlying problem is an irresponsible attitude in the banking industry - which will not go away if the government lets them know they can do what they like and still be bailed out. If I took a risk worth several times my cash deposits, the government wouldn't bail me out...
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The sub-prime mortgaging was down to the comission based system that the retail agents worked on. ie - the more houses they sold, the more money they got - I doubt they stopped to think about possible consequences from selling houses to people who couldn't pay for them, I'm pretty sure they thought that it wouldn't affect.
Also the difference between you and a bank is that if you took a risk and lost out, it wouldn't cause the world's economy to crash.