http://bit.ly/7XwAG
When Ex IMF chief economist Raghuram Rajan predicted the global banking crisis due to faulty policies of the Federal Reserve under Alan Greenspan, the powers to be thought he was crying wolf. After the crisis when Rajan wrote his widely acclaimed best seller Fault Lines predicting yet another bigger crisis due to continuation of the faulty monetary policies adopted by the US , Europe and the emerging economies, he was widely acknowledged but his advice still ignored. The brinkmanship of the politicians and the Federal Reserve at the behest of the banking community has been now brought alive in the 635 page report of the Senate Committee headed by Senator Carl Levin , a must read for those who want to know how the taxpayer was cheated and how people in the Banking community lent money without checking the credentials or the capacity to repay of the borrower whoever they deemed fit.
http://levin.senate.gov/newsroom/supporting/2011/PSI_WallStreetCrisis_041311.pdf
It seems the trend continues unabated with the TARP and the QE2 funds being similarly squandered . High risk lending and shoddy documentation practices still continue in the Federal Reserve and the Wall Street Banks with regulatory oversight due to two reasons. Part of the employees of the regulator are conniving with the people subverting the system. Others cannot challenge the plethora of complex mortgage and credit default risk instruments that the bankers are churning out at high speed due to the sheer volume and complexity of the documentation, and the fact that the top bosses of the regulators are simply not
interested. So fault lines are deepening and a new crisis is developing that could be much more complex
and catastrophic than the previous one.
When Ex IMF chief economist Raghuram Rajan predicted the global banking crisis due to faulty policies of the Federal Reserve under Alan Greenspan, the powers to be thought he was crying wolf. After the crisis when Rajan wrote his widely acclaimed best seller Fault Lines predicting yet another bigger crisis due to continuation of the faulty monetary policies adopted by the US , Europe and the emerging economies, he was widely acknowledged but his advice still ignored. The brinkmanship of the politicians and the Federal Reserve at the behest of the banking community has been now brought alive in the 635 page report of the Senate Committee headed by Senator Carl Levin , a must read for those who want to know how the taxpayer was cheated and how people in the Banking community lent money without checking the credentials or the capacity to repay of the borrower whoever they deemed fit.
http://levin.senate.gov/newsroom/supporting/2011/PSI_WallStreetCrisis_041311.pdf
It seems the trend continues unabated with the TARP and the QE2 funds being similarly squandered . High risk lending and shoddy documentation practices still continue in the Federal Reserve and the Wall Street Banks with regulatory oversight due to two reasons. Part of the employees of the regulator are conniving with the people subverting the system. Others cannot challenge the plethora of complex mortgage and credit default risk instruments that the bankers are churning out at high speed due to the sheer volume and complexity of the documentation, and the fact that the top bosses of the regulators are simply not
interested. So fault lines are deepening and a new crisis is developing that could be much more complex
and catastrophic than the previous one.
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