Congress, Fed fiddled as subprime crisis spread
A tad bit more than about ten years ago, William Brennan foresaw the financial collapse of 2008.
As manager of the property Defense Program during the Atlanta Legal help Society, he viewed as subprime lenders received profits that are enormous mortgages to individuals who demonstrably couldn’t manage them.
The loans had been harmful to borrowers — Brennan knew that. He additionally knew the loans had been harmful to the Wall Street investors purchasing up these shaky mortgages by the thousands. In which he talked up about their worries.
“I think this household of cards may tumble some time, and it’ll suggest great losings for the investors whom possess stock in those companies, ” he told people in the Senate Special Committee on the aging process in 1998.
As it happens that Brennan did know how right n’t he had been. Not just did those loans bankrupt investors, they nearly took straight down the whole banking system that is global.
Washington had been warned provided that about ten years ago by bank regulators, customer advocates, and a few lawmakers why these high-cost loans represented a risk that is systemic the economy, yet Congress, the White home, and also the Federal Reserve all dithered as the subprime tragedy spread. Read more