William Black on What Inspires Financial Fraud

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As we close in on the fourth anniversary of the start of the financial crisis (Lehman Brothers filed for bankruptcy on September 15), it’s important to focus not only on institutional causes, but also catalysts related to the dark side of human nature. In this 2009 Moyers Moment from Bill Moyers Journal, veteran bank regulator and watchdog William Black describes the environment of fraud, deceit and deliberate betrayal that set disastrous events in motion.

“There’s no more effective acid against trust than fraud, especially fraud by top elites,” Black tells Bill. “And that’s what we have.”

Watch Bill’s full conversation with William Black.

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  • Anonymous

    When the hell are we going to stop restating the obvious.

  • http://www.facebook.com/jamestennier James Tennier

    Four years into the “collapse” and I have (recently, 6 months or so) come to the same conclusion as Mr Black. This finding has taken a lot of reading, listening which I realize has always been one of my strengths by virtue of it’s being a weakness in the character of my friends. Opposites attract. And just trying to learn. This is the problem with being young, one knows everything already and we loose it as we age. For those that might read this post, know the elites are on target for accomplishing their ends of making this a society of renters, in spite of all the ownership society talk of the last decade. As Mr Black states in this (short) peace, “get them to trust you, be paid YOUR commissions, foreclose, reaping the rewards,” in that you’ve no skin in the game as you had securitized the “asset” before the ink had dried. Loss to be absorbed by hapless investors (of Goldman Sacs) or the taxpayer. Now all that’s left to do is rent the remains back to the original owners! Brilliant! Also, the beginning of our end. We call ourselves “Civilized”

  • http://www.facebook.com/people/Catherine-Mason/705689570 Catherine Mason

    When are these guys going to be prosecuted? What has happened to the investigation that President Obama promised would be done by Eric Holder and the DOJ?

  • philip meguire

    Congress enacted a statute in 2009 that created a procedure for negotiating the balance of one’s mortgage downwards.
    http://en.wikipedia.org/wiki/Home_Affordable_Modification_Program (HAMP)
    http://en.wikipedia.org/wiki/Home_Affordable_Refinance_Program (HARP)
    http://en.wikipedia.org/wiki/Loan_modification_in_the_United_States

    The result is a shambles, rife with moral hazard. And at most a few hundred thousand households have been helped thus far.
    http://www.foxbusiness.com/industries/2012/05/02/mortgage-programs-target-many-help-few/

    All this would not have happened if the loan to value ratio for residential mortgages had been capped at 80%, and if Fannie and Freddie had maintained the pre-1998 mortgage underwriting standards.

  • James Tennier

    The day after hell freezes over?

  • James Tennier

    Ask Holder! Oh, and good luck on getting his reply!