The Bankwatch

Tracking the consumer evolution of financial services

NY Attorney General launch inquiry into pooling (derivatives) practices amongst big banks

While banks march on apparently as if nothing happened in 2008 nor the years leading up to it, there continues to be a host of regulatory and investigative work continuing.  The latest is from the New York attorney general office who are pursuing an inquiry into pooling practices, ie, the dreaded derivatives and Asset Backed Commercial Paper in particular.

New York Investigates Banks’ Role in Fiscal Crisis | NY Times

Officials in Mr. Schneiderman’s office have also requested meetings with representatives from Bank of America,Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations.

I suspect this inquiry in part will have derived from the WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse pdf 5.5 MB released in April this year.

As ugly and uncomfortable as this is, it makes sense.  Derivatives are the least understood soft underbelly of the banking crisis.

Written by Colin Henderson

May 16, 2011 at 22:37

Posted in Uncategorized

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