Sounds like they mismanaged bond investments from what I've read. Rates go up, old bonds are worth less. I'm guessing it's incompetence, but I saw an article speculating that smaller banks have more trouble managing it. So, I'm not really sure. Destruction of small banks would be favorable to the Party though.

I don't think it's 2008 over again in this case. I won't touch mortgage bonds though, because I think that crash is still coming.