Ep. 7 – Phil Angelides: Big Banks, The Financial Collapse; They Got Away With It!

People should take notice when someone like Phil Angelides talks about the 2008 financial collapse and says the largest banks in the country, “…got away with it!”  Angelides was Chairman of the Financial Crisis Inquiry Commission. Congress created the commission to investigate the financial collapse and recommend ways to avoid another catastrophe.  When the Commission issued its final report in 2010 more than 8 million Americans had lost, or were in the process of losing their homes to foreclosure, 26 million were unemployed and $11 trillion in household wealth had been wiped off the books. At the center of the crisis was the US housing market and trillions of dollars in mortgage backed securities that went bust. The commission concluded, “Financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine or knew to be defective…”

But six years after the commission’s report aired Wall Street’s dirty laundry, nobody has been charged with a crime.  In this TALKENOMICS interview Angelides calls that a major mistake. “Major financial institutions, including Goldman Sachs, included significant numbers of clearly defective loans in mortgage securities they were peddling to investors and then misled investors about the quality of loans in those securities.”

The Commission recommended the US Department of Justice investigate some of the nation’s most prominent business leaders for their role in the financial collapse; people like former US Treasury Secretary Robert Rubin who was on the board of Citigroup which got $476 billion from US taxpayers in cash and guarantees, according to a Congressional Oversight Panel. Angelides says the failure of the Obama administration to prosecute just one Wall Street insider sets the stage for another catastrophe, “as a result it will not deter future financial law-breaking and will further undermine the public’s faith in the fairness of our legal system.”