Just how clever are the Bankers?

So Mortgage Application rejections in the UK are up 40% compared to a year ago. Apparently Mortgage lenders have decided to be more careful not only about who they lend to , but how much they lend. Whereas 12 months ago they would happily lend 100% or 105% of the value of the property, now they want to see a large deposit. Why the sudden change?
Well, those clever bankers have just discovered that all those high risk loans are just that, high risk. I'm sure most of us could have told them that, without needing to be a clever banker. The Bank of England say they hope things will return to normal soon.
BUT...what's normal?
If normal is to go back to the lending policies of 12 or 18 months ago then God help us all.
I have no doubt that bricks and mortar are a good long term investment; BUT long term, not short term. Don't get me wrong, I have every sympathy for those who borrowed big, and probably more than they should wisely have done, and now see their mortgage debt larger than the value of their property. But unless they were hoping for a fast turnover and to make a quick profit why does it matter? It will resolve itself with time, as long as they can keep up the payments.
If they bought with the idea of making a quick profit then they shouldn't complain. They made a business decision, weighed up the risks and went ahead. No different to buying stocks and shares.
The reduction in lending means property prices will find their own level, as they always do; a level which will be more consistent with prudent borrowing and not inflated by high risk lending. Isn't it clear now that the people responsible for the rapid rise in property prices over the last few years are those clever bankers.