NRK collapsed due to buying US sub-prime mortgage deals. Buying them was a bad idea, and putting all its eggs in one basket was worse, but I think Schmidt is getting at the fact that these deals were available in the first place and no-one thought they were a bad idea. NRK is also small fry compared to Mae and Mac.

As for leverage/deregulation,

"So the banks are busy creating money and making a lot of money on that creation of money and the regulators were either, depending on your point of view, asleep at the wheel or did not have the tools to understand what was going on"