Regulators Warned 8 Years Ago Of CDO Crisis

Via Danny Schechter–

In a luxurious chateau in Alsace eight years ago, a top financier made a confession: some of the complex financial instruments being pumped out by the world’s biggest investment banks were potentially “toxic”. Top regulators were left in no doubt of the perils hiding in the financial system after the two-day summit aimed at finding and disarming the bombs waiting to explode.

The toxic instruments highlighted by the banker were collateralised debt obligations (CDOs). Little was known of them when this regulatory teach-in was taking place, but since then banks have embraced them as a way of shifting debt off their balance sheets, enabling them to lend more. They have been bought enthusiastically by many investors across the financial system. As they began to blow up last year, there was mayhem at banks and brokers on Wall Street, which, in turn, sent shock waves through the world’s financial markets.

Oh my god, it’s a long article and the finacio-culture does induce eye glazing, but that’s what the crooks of capital rely on. Also it assumes an awful lot of good faith and lays few accusations (oh our libel laws, oh our polite journos) but worth a perusal just to see the scale of greed and arrogance at the core of the system that wrecks our planet.