Markets are inanimate objects, and they can therefore neither fail nor succeed. Only animate objects, like people, have a variable state of being and can induce failure or success. Yes, I know, you’ve been misled in economics class.
A market is merely a manmade account of the sum of current exchanges in a marketplace, entered into by people. So, only people who participate in the marketplace can “fail or succeed” to trade whatever they deem of value.
Hence, a market failure you refer to stems from diminishing trust in the value of what is being exchanged. A trust either decreased by the value offered by the seller or by the lack of interest from the buyer, influenced by the arbitrage of finance controlling the valuation and methods of that exchange, with ultimately the government systems stipulating the rules of all exchanges.
To answer your question, it is unlikely the sum of trust of all buyers or sellers have changed all that much, for the products or services offered are unlikely to have changed all of a sudden or dramatically from a year earlier. Nor is the role of government critical but for the protection of downside, as the government does not play a meaningful role in establishing or enabling upside. Government merely acts similar to a referee in soccer, it creates and enforces the rules of the game, it is not responsible for gameplay – win or lose.
So, the most likely cause of the crash of 2007/8, like it was in 2001 (a dotcom crash it was not), stems from the spiraling subpriming of financial arbitrage, as any system in violation of the most rudimentary principles of freedom would yield. The thesis, in Einstein’s words, determining what can be discovered.
Finance, now a hydrocephalus of eleven times the size of production as a contribution to U.S. GDP, not held to a rulebook to produce socioeconomic value to humanity instead promotes a vile-maxim rat-race for valuations, with the bottom again to fall out more frequently causing a compounding and cascading disparity between valuations and socioeconomic value.
We can make such change happen from the day we are ready to take ourselves on. For I, noticing our manmade mess regurgitated years ago, have developed new first-principles for a better operating system of humanity, this time in-line with evolution’s rulebook.