William Black is an associate professor of economics and law at UMKC. He has held many prestigious positions, including executive director for Fraud Prevention. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management. He is a criminologist and former financial regulator.
I honestly hope that everyone who actually listened to this ted talk with Mr. Black knows that he's genuinely providing you with good information on how these Large banking systems work with this (build the Titanic then sink it for the insurance money) way of legally fucking over the American people with liar loans or the bullshit use your homes equity for fucking whatever loans. We the people need to be aware of this criminally predatory way of how these banking systems do business. And know this problem is not just happening here the states.... it's fucking happening with the global economy. We are merely pawns in the chess game of greed.
The common ‘recipe’ for this style of fraud is easy to see, and follows the same trends:
- Grow like crazy
- Buy or make crappy loans at a premium yield
- Employ extreme yield
- Keep only trivial loss reserves.
- This will give amazing returns to the bank, and easily enough to trigger massive executive bonuses. However a few years down the line, the bank is doomed to take a large hit.
William’s solution to banking regulation
- abandon the ‘too big to fail’ mantra. They need to be shrunk to the point where their failure will not trigger wider losses.
- we need to rework modern executive professional salaries. It is too big an incentive to defraud the system and can create a situation where good ethics can be driven out of the system by bad ethics (unscrupulous appraisers).
- deal with deregulation, de-supervision, and defacto decriminalisation. Over time, it has become trendy not to regulate banks, even when the regulators can see what is happening.
- By making these changes, we can decrease the frequency and impact of future banking crises. We need to learn what the bankers learned – the recipe to rob a bank.
Curiosity is the single most important attribute with which humans are born. More than a simple desire to discover or know things, curiosity is a powerful tool, like a scalpel or a searchlight. Curiosity changes us. It is also a way to effect change, perhaps even on a global level.