4 ms·

How many bankers went to jail from the 2008 financial crisis?

• 0xy 3y ago
  Banks were forced, basically at gunpoint, to lend to extremely high-risk borrowers (most of the minority communities) in poor areas by the federal government. The Community Reinvestment Act, and other strong-arming laws, loaded mortgage securities with sub-prime debt bombs -- thanks to the government. Banks were responding to carrots and sticks from the government. It's no surprise, since the line between banks and government is extremely blurry. Government capitalizes, incentivizes and strictly controls bank operations. Bankers were the fall guys for government pressure to give unaffordable homes to minority groups.
  • YeBanKo 3y ago
    Can you share more info / links on this take? In this [1] conclusion by the federal reserve it assigns little weight to its contribution to the crisis. I think that the government would be reluctant to blame itself rather than banks, so valid criticism can come from the outside.
  • GeekyBear 3y ago
    > Banks were forced, basically at gunpoint, to lend to extremely high-risk borrowers Are these the same banks that were choosing to issue loans to people with no job and no assets? >A NINJA (no income, no job, and no assets) loan is a term describing a loan extended to a borrower who may have no ability to repay the loan. https://www.investopedia.com/terms/n/ninja-loan.asp https://www.investopedia.com/terms/n/ninja-loan.asp Banks were making loans to anyone, taking their cut, selling those loans to investment banks on Wall Street (who also took a cut) and rolled them into collateralized mortgage backed securities, which were fraudulently marketed as having very little risk and sold to the public. The banks didn't care if the home buyer couldn't pay, because they were just taking a cut and passing off the risk to the public.