It’s easy to forget, with all the propaganda being published by major media, why these Fed/OCC consent decrees were issued in the first place. The fact that a borrower may be in default does not negate the overwhelming evidence that court cases have provided that banks proceeded fraudulently and illegally in some foreclosures and looted those borrowers and institutional investors in mortgage securities by charging fraudulent and illegal fees in the process.
It’s difficult for me to imagine a new generation of systemically important financial services company CEOs without strong risk management experience. But the newly prominent role also gives shareholders, regulators, and the media an easy target for ridicule after a corporate stumble or failure.
Have you been following the trials and tribulations of Bank of America and their auditor, PricewaterhouseCoopers, LLP?
John Carney at CNBC NetNet is talking a lot about repurchase risk. He’s tied it all together in a bow for us, mentions Citigroup and Bank of America, and has given me credit for having been on KPMG’s case for a while.
The global money center banks are masters at managing financial reporting. Regulators repeatedly feign surprise at balance sheet sleight of hand, prestidigitation at the expert level intended to buy time until the banks can grow out of the black hole that bubble lending put them in. They announce their quarterly results, with all the details – they don’t even try to hide them anymore – and they’re ignored or the con is traded on for short term profits. We’ve yet to see the auditors called to testify to explain their role in blessing fraudulent bank balance sheet accounting.
Isn’t it about time?