Re: Major Causes of Financial Mess
- From: jay <jaym1212@xxxxxxxxxxx>
- Date: Tue, 30 Sep 2008 14:11:12 -0700 (PDT)
My guess is that they were no longer regulating the lending standards as they were before Phil Gramm came along with his great deregulation scheme. And, as that led to lesser creditworthy borrowers, that led to the financiers needing more product to sell (money to loan) and they cooked the books to show that their borrowers were more financially stable than they really were in order to get more money to lend.
It appears Phil Gramm, besides providing a loop hole for Enron, where
his wife worked, also changed regulation (approved by Clinton) which
then allowed financial companies to own banking companies. As an
example, this allowed UBS to purchase several American institutions
and issue subprime mortgages. Gramm later became a lobbyist for UBS,
collecting over 750,000 USD in fees.
.
- References:
- Major Causes of Financial Mess
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