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[Octafish]

18. FOX is Right.

Last edited Sat May 18, 2013, 03:33 PM - Edit history (1)

Along with Rev. Freeping Sun Myung Moon, FCC let Freeping Rupert the Alien Murdoch in to rule the roost.

Vice President George Herbert Walker Bush led the deregulation efforts, from the FCC to INS to Wall Street to West.

The War against the Regulatory Cops on the Bank Beat

Monday, 30 July 2012 07:26
By William K. Black

EXCERPT...

The LIBOR and HSBC scandals simply confirm that the largest banks in the world will repeatedly violate the law and lie if they believe they can get away with it. The only entity that should consistently have the incentive to tell senior regulators the truth about problem and fraudulent banks are the examiners. Similarly, banks with honest senior leaders should love the independence of examines. Blankfein is right about examiners – they “don’t work for us.” That is why they are uniquely valuable. Examiners routinely speak truth to power. The author has no clue how rare and how valuable that is to an honest bank’s senior managers, to senior regulators, and the nation. The author also has idea how threatening a trait it is to the CEO running a control fraud.

SNIP...

The anti-regulators won prior wars on examiners – and produced recurrent disasters

Neither the WSJ author, Tarullo, nor whatever failed economist is telling Tarullo that information provided by the industry constitutes “hard data” is aware that we have heard this refrain before. [font color="red"]President Reagan’s task force on financial deregulation, chaired by Vice President Bush, recommended cutting the number of examiners and relying primarily on data provided by the banks and S&Ls. The Reagan administration immediately cut the number of S&L regulators. The results were disastrous.[/font color] California and Texas cut dramatically the number of their S&L examiners and supervisors. The results were disastrous.

The nonprime industry did something analogous. They reduced their reliance on loan underwriters and substitute reliance on automatic underwriting systems. These were grotesquely unsophisticated systems that typically ignored and facilitated fraud by the lenders and their agents. They were invariably called “sophisticated” systems. Their testing was farcical. To ensure the worst of both worlds, the fraudulent lenders’ managers could always override the automatic underwriting system and use “exception” authority to approve the worst loans. Countrywide was a classic example of a faux automatic underwriting system surrounded by tens of thousands of flaky exceptions. The results were disastrous. Experienced human underwriters invariably found copious bad nonprime mortgage loans. The fraudulent lenders (and purchasers) treated underwriters who displayed competence and integrity as the enemy. The results were disastrous.

The FDIC and the OTS cut the number of their examiners and sought to rely far more on the data provided by the industry. The results were disastrous. The Basel II economists who encouraged the SDIs and their regulators to rely on the SDIs’ proprietary models believed that doing so would allow “sophisticated” banking and regulatory decisions to be made on the basis of “hard data” that were far more reliable than examiners. The results were disastrous.

I doubt that there are five economists in the world who know this consistent history of disastrous failure. The chance that the pseudo-supervisors advising Tarullo knows of the failed history of efforts to substitute reliance on industry-supplied information as “hard data” for the judgment and expertise of examiners is nil.

CONTINUED...

http://therealnews.com/t2/component/content/article/75-more-blog-posts-from-william-black/1130-the-war-against-the-regulatory-cops-on-the-bank-beat

Of course, Poppy's Dim Son was there for Deregulation II in 2008 when all those trillions vanished into thin air. A coincidence, no doubt, missed by the Vanguards of the National Press Corpse.

You got a great memory, siligut. If more people knew what you knew, the greedheads and warmongers would be on the run rather than affording to lawyer up. Thank you!