How does one propose “sound practices” for practices that are inherently unsound? Yet that is what our regulatory guardians did. The statement is powerful evidence of the permissive approach bank regulators took toward the debt-dissolving financial products that our banks had been developing, hawking and using themselves for years. And it’s good reason for Americans to be outraged by the “who me, what, where?” reaction of Mr. Bernanke and the S.E.C. to the revelation of Lehman’s Repo 105 scam.
via Op-Ed Contributors – How Washington Abetted the Bank Job – NYTimes.com. Extremely edifying article on how regulators allowed banks to create derivatives that were backed with little to no real security and marketed as a gold standard product.