We have known since the Enron in 2001 that this is a common scam, in which every major bank that was approached by Enron agreed to help them deceive creditors and investors by doing these kind of transactions.
And so what happened? There was a proposal in 2004 to stop it. And the regulatory heads — there was an interagency effort — killed it. They came out with something pathetic in 2006, and stalled its implication until 2007, but it ’s meaningless.
We have known for decades that these are frauds. We have known for a decade how to stop them.
That’s Bill Black, the former Litigation Director for the Federal Home Loan Bank Board, in testimony before Congress. This is the true story of the mortgage crisis, the financial crisis and the Great Recession, available on video on FireDogLake. You must watch it to believe it.