Appearing before The Financial Crisis Inquiry Commission, a panel investigating the financial crisis of 2008, Goldman Sachs (GS) Chairman and CEO Lloyd Blankfein said — when asked by the commission’s chairman Phil Angelides about Goldman’s practice of packaging toxic assets into bond-like securities and selling them to investors, even as the firm was shorting the heck out of ’em — his firm’s ” behavior was improper.”
AP: “It sounds like selling a car with faulty brakes and then buying an insurance policy” on the driver, Angelides [a former Democratic state treasurer of California], said in an animated exchange with the Goldman Sachs executive.
Responded Blankfein: “I do think the behavior is improper.
We regret the consequence that people have lost money in it.” Blankfein acknowledged lapses in judgment in some practices leading up to the crisis.
“Whatever we did, it didn’t work out well,” he said.
“We were going to bed every night with more risk than any responsible manager would want to have.”
Bank of America (BAC) chief executive and president Brian Moynihan said “We understand the anger felt by many citizens..We are grateful for the taxpayer assistance we have received.”
“Over the course of the crisis, we as an industry caused a lot of damage”.
The 10-member Inquiry Commission has six Democratic appointees and four Republicans. The panel must produce a report on the causes of the crisis by Dec. 15. Regardless of the report’s finding, one thing is certain, we can fix the problem by taking money out of these so-called ‘too-big-to-fail’ and ‘too-well–politically-connected’ superbanks and use instead small local banks who have acted responsibly. These ‘fat cats’ running institutions that were originally set up to serve a public need, must realize people can vote with their deposits.