Who's Behind the Financial Meltdown? The Top 25 Subprime Lenders and Their Wall Street Backers is a mammoth study on the financial meltdown, why it happened, and who is responsible.
We're not saying any one person should be singled out for blame, necessarily. However, we are providing a few candidates based on the facts. Think of this as a tripod of blame - a three-legged stool of responsibility, or better yet, irresponsibility:
First, there are the subprime lenders - the worst of which saturated the airwaves with commercials, bombarded e-mail inboxes with spam, and happily made loans to virtually anyone who could sign their name.
Second, there are the giant Wall Street and European investment banks that backed all that subprime lending. They put up hundreds of billions of dollars so they could create securities from these risky mortgages to sell to investors.
And lastly, there is the government that stood by and did nothing. Bottom line: We have witnessed a massive regulatory failure of catastrophic proportions.
In this project we identify the top "Subprime 25" lenders. We report that at least 21 of them were either owned or financed by a financial institution that has received government bailout money, and that four of these have paid big settlements for lending abuses.
This is a point that's been made before, but never so forcefully, and with such solid documentation behind it-the subprime crisis was created by the very banking institutions that are now being bailed out. They quite literally did it to themselves. Just to get things started, here's the list of the top 10 lenders:
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