By William K. Black
(Cross posted at Benzinga.com)
Two years ago, I wrote an article entitled “The Bank of England Sows the Seeds of the Next UK Crisis.”
I was not vain enough to believe that the British establishment would listen to my critique. The books authored recently by Jeff Connaughton, Neil Barofsky, and Sheila Bair have made clear that the dominant strategy of the Bush and Obama administrations has been providing aid and comfort to the banksters who drove the crisis rather than holding them accountable for their crimes. The Brits are following the same dominant strategy.
The Brits championed two financial regulatory policies in the lead up to the crisis. First, all financial regulation would be conducted by the Financial Services Authority (FSA) to avoid any regulatory gaps or inconsistent policies. Second, the City of London led the global “race to the bottom” of regulation. Markets were assumed to be self-regulating through “private market discipline.” Material accounting control fraud was assumed to be impossible given this discipline. Financial regulatory leaders were chosen based on their devotion to these dogmas.
The Conservative Party came to power largely on the basis of the financial crisis and resulting Great Recession. The Party had to adopt regulatory “reforms” – but it despises regulation even more passionately than its anti-regulatory (Labour) predecessors. Being clever politicians, the Conservative Party used the opportunity to further weaken financial regulation while calling it a reform. It broke up the FSA, transferring prudential (safety and soundness) supervision of banks to the Bank of England (BOE). The BOE leadership is a bankster’s wish list. It also plans to create a Financial Conduct Authority (FCA), which is supposed to issue broader rules. BOE also has an office of quants – the guys who got everything important as wrong as it is as possible to get things wrong – who are supposed to spot systemic risk before it blows up the economy.
My November 2010 article criticized this faux regulatory reform plan for embracing “two recurrent and related myths that are the enemy of effective financial regulation.
• Control fraud by financial institutions can be ignored
• Bank examiners and bank underwriting add little value and can largely be displaced by software”
The British continue to ignore control fraud – even though they virtually concede that an epidemic of accounting control fraud drove their crisis. On January 25, 2012, Martin Wheatley delivered a speech to the British Bankers’ Association entitled “My Vision for the FCA.”
“And so it must be different from some of the behaviour we saw during the boom years for the housing market.
Here we saw many examples of both poor lending and poor borrowing. It became more common for people to borrow without having their income verified – 45% of people did this at the market’s peak – and, as many have observed, both lenders and consumers were caught up in a misplaced faith in never-ending house price rises.
It is now obvious that the market in the years leading up to the crisis was unsustainable. The crisis and its aftermath changed things temporarily, but we want to change things for the better, for good.
And so here we have to look at the FSA’s mortgage market review proposals, these are currently out for consultation; we hope to be able to finalise rules in the summer.
And what our first-time buyer won’t see in a FCA-regulated world is a queue of lenders waiting to offer them a loan on the basis of what they claim their income is, with no proof required.”
And they won’t find brokers thinking they can get away with persuading them to lie about their income.
This is why, based on our discussions with you, with brokers, and with consumer organisations, we are embedding common sense standards to lending across the board, so that we don’t see a return to the risky mortgage lending and borrowing seen in the boom times.”
Yes, Wheatley just admitted that 45% of the UK mortgage loans at the “market’s peak” were liar’s loans and implied that it was the norm for such loans to be fraudulent. By 2006, roughly 40% of U.S. mortgage loans originated that year were liar’s loans and that rate had been growing massively, so it is likely that the percentage of liar’s loans made in the early months of 2007 was 45%. The equivalence of the British and U.S. fraud epidemics that drove their respective crises is striking – and generally ignored in both nations.
Note that Wheatley assumes, without facts or analytics, that the borrowers must have put the lies in the liar’s loans. U.S. investigations have confirmed what we knew analytically – lenders and their agents put the lies in liar’s loans. Wheatley spreads the myth of equivalency based on a conventional wisdom he never questions.
“Here we saw many examples of both poor lending and poor borrowing. It became more common for people to borrow without having their income verified – 45% of people did this at the market’s peak – and, as many have observed, both lenders and consumers were caught up in a misplaced faith in never-ending house price rises.”
Wheatley’s tale is one of bad borrowers and bad lenders embracing the same “faith” about “never-ending house price rises.” His tale is convenient to the banksters for it ignores power, financial sophistication, causality, and fraud. We need to back up and ask why banks would have a deliberate policy of making liar’s loans their growth strategy. Remember, no U.S. or UK regulator ever required a bank to make liar’s loans. No U.S. regulator ever recommended that a bank make liar’s loans – even the Bush administration and the FSA discouraged them.
We need to also cut through the nonsense that the FSA spread about liar’s loans when it took regulatory jurisdiction over them in 2004. Self-certified (liar’s) loans were only supposed to be made in rare circumstances where such loans were “appropriate.” The so-called appropriate circumstances would include a buyer on a “deadline” to acquire a home where the lender could have confidence in the accuracy of the self-certified income due to a long-standing, satisfactory banking relationship with borrower. When 45% of all mortgage loans supposedly meet such a rare standard of appropriateness it is obvious that the official story is nonsense. Absent bona fide rare circumstances where a loan must close almost within hours and the bank really has a long-standing, positive financial relationship with the borrower making a home loan without conducting such an essential underwriting step as verifying the borrower’s income is suicidal. We have known for centuries that not underwriting produces “adverse selection” and that adverse selection causes lending to have a “negative expected value.” In plain English, that means that the lender will lose money and fail. No honest lender would make liar’s loans as a material business.
Liar’s loans, however, are superb devices for optimizing a lender’s “accounting control fraud” recipe. The recipe has four ingredients:
(1) Grow rapidly by
(2) Making terrible loans at a premium yield while
(3) Employing extreme leverage, and
(4) Providing only grossly inadequate Allowances for Loan and Lease Losses (ALLL)
As George Akerlof and Paul Romer explained in their 1993 article (“Looting: the Economic Underworld of Bankruptcy for Profit”), accounting control fraud is a “sure thing.” It guarantees reporting record income in the short-term, exceptional bonuses and wealth to the executives, and catastrophic losses to the lender. The firm fails (unless bailed out), but the executives walk away wealthy. Liar’s loans are attractive to the fraudulent CEOs who control lenders because they are made at a premium yield and they remove the need to falsify or destroy the documentation that would normally be required. Honest documentation would demonstrate that the lender knew at the time it made the loan that the borrower was uncreditworthy and the borrower’s reported income fraudulent. When lenders falsify or destroy underwriting documentation it makes it far easier to prosecute the officers who lead the frauds.
One must either believe that the largest mortgage lenders in Great Britain simultaneously decided to commit suicide or that they were led by frauds and were subject to a Gresham’s dynamic in which bad ethics drove good ethics out of the marketplace. If there is anyone who believes the mass suicide theory, the burden is on that person to demonstrate that each senior mortgage lending executive suddenly had his memory erased and no longer remembered adverse selection or negative expected value and had a false memory implanted that demonstrated that endless financial bubbles could occur. They also had to unlearn everything bankers, regulators, economists, and white-collar criminologists had ever learned from past epidemics of accounting control fraud. Have I mentioned that Akerlof was awarded the Nobel Prize in Economics? The alternative explanation for the crisis does not require universal irrationality, mass amnesia about prior crises, or mass “faith” in an unprecedented, eternal housing bubble. Banksters taking advantage of a “sure thing” to become wealthy is a very old story that does not require any heroic assumptions.
Wheatley implicitly concedes that the UK mortgage crisis was driven by fraudulent liar’s loans, but he implicitly assumes that it was the borrowers who put the lies in liar’s loans. His key phrase was “lenders waiting to offer them a loan on the basis of what they claim their income is, with no proof required.” The implication is that it was the clever borrowers who were making false “claim[s]” about their incomes in order to defraud the poor, financially unsophisticated lenders. Wheatley knew that it was actually the loan brokers who took the laboring oar in inflating the borrowers’ income, but he still ends up blaming the borrowers.
“And they won’t find brokers thinking they can get away with persuading them to lie about their income.
This is why, based on our discussions with you, with brokers, and with consumer organisations, we are embedding common sense standards to lending across the board, so that we don’t see a return to the risky mortgage lending and borrowing seen in the boom times.”
Wheatley understands that the brokers are the key actors desperate to put the “lie” in UK liar’s loans, but he still makes the implicit assumptions that the borrowers must have made the lies. He does not even consider the possibility that the broker would create and submit the lies. This is naïve. What Wheatley doesn’t deem worthy of analysis is asking (1) why so many UK loan brokers routinely urged borrowers to inflate their incomes and (2) why the lenders chose to make liar’s loans knowing that they were endemically fraudulent. Given the fact that the context of his speech is how to fix the regulatory failures that allowed the crisis to occur, and given his implicit recognition that the crisis was driven by an epidemic of mortgage fraud, one might think that he would be would be doing an intensive “autopsy” to answer these two critical questions. But if one does not even understand the concept of accounting control fraud one does not even know the questions to ask. The FSA did not, and the FSA and BOE do not, have any comprehension of accounting control fraud.
The entire “every senior officer simultaneously went insane” theory of the UK crisis falls apart as soon as one asks the two questions about liar’s loans. The brokers and lending officers inflated income deliberately. That does not occur because of over optimism, a belief in eternal bubbles, or mass irrationality. It happens because the brokers and the lenders know that that they are lending to people who frequently cannot afford to repay the loans. They know that they must inflate the borrower’s income to get the loan approved and receive their fee.
But asking why loan officers and loan brokers inflated borrowers’ income is only the initial level of the necessary inquiry, for their actions were perfectly predictable to the lenders’ senior executives. Their primary expertise is managing. They are experts on incentive structures. Predicting that significant numbers of relatively low-paid loan officers and loan brokers will respond to crude, large (relative to their income) incentives based on loan volume and yield rather than long-term loan performance is child’s play by inflating borrowers’ incomes is child’s play. Remember that it is not essential or even important to create incentives that will cause all loan officers and loan brokers to inflate borrowers’ incomes. A relatively small percentage of loan brokers willing to inflate borrowers’ incomes can process vast amounts of fraudulent loans. One of the subsidiary advantages of liar’s loans is that they require less paperwork and can be processed more quickly. The second level of inquiry, therefore, is why bank CEOs routinely created – and maintained – compensation incentives for loan officers and loan brokers that they knew would produce endemic mortgage fraud and catastrophic losses to the bank. Accounting control fraud is a sure thing guaranteed to promptly make senior bank executives wealthy. It is a hard and a desperately uncertain endeavor to try to make record profits honestly in a mature, competitive industry. Some CFOs will choose the sure thing and they and their CEOs will become wealthy through bonuses based largely on short-term reported income. Other CFOs will refuse to engage in fraud and will report far lower short-term incomes. Those CFOs and their CEOs will not receive massive bonuses. The result is a Gresham’s dynamic in which bad ethics drives good ethics out of the markets. The honest CFOs will tend to be fired by their CEOs.
The third level of inquiry is why the banks’ senior officers continued to make liar’s loans their dominant loan product even as liar’s loans massively expanded the demand for housing, hyper-inflating the bubble and it became ever clearer that the loans were often fraudulent. Again, Wheatley has it exactly wrong, claiming that the key is to stop “risky mortgage lending.” He misses the central concept of the “sure thing.” Yes, accounting control fraud causes risky lending in order to obtain higher yields, but it does not involve “risk” in the conventional financial sense of the term. The outcomes of accounting control fraud are certain, not “risky.” The bank CEO who continues to create perverse compensation incentives that produce endemic fraud and continues to make liar’s loans is deliberately creating a criminogenic environment designed to produce an “echo” fraud epidemic in another field or profession (e.g., loan brokers or appraisers) intended to aid the overall fraud.
If one wonders why the UK banksters were able to loot with impunity Wheatley’s failure to understand or even think hard about the epidemic of fraudulent liar’s loans that drove the UK crisis should be Exhibit One. His understanding of the crisis is so divorced from reality that the regulatory reforms miss the central cause of financial crises.
Similarly, Wheatley’s false equivalence between borrowers and lenders is nonsense. The lenders’ senior executives who designed and managed the perverse incentives that drove the mortgage fraud epidemic had the economic and political power and the financial expertise. The borrowers on liar’s loans, disproportionately, were poorer than the median homeowner. Indeed, they were often below the poverty line and obviously in no position to repay a loan. They were induced by the lenders and their agents to pay a premium yield, for loans that were grotesquely inappropriate, at the peak of an unsustainable bubble that would destroy their limited savings and expose them to financial ruin. Independent studies (“Set up to Fail”) and the FSA confirmed during the build-up to the crisis, in the specific context of liar’s loans, that the lenders dominated the borrowers.
Wheatley has failed to do everything fundamental that he discussed in his January 25, 2012 speech to the British Bankers Association on “My vision for the FCA.” He said the right thing:
“The FCA will need to ask tougher questions, and they need to be the right ones, if we are really going to discover what lies at the heart of your firms’ successes and failures.
And we will use specialist teams to look at what you are doing in detail, in a range of ways, including talking to your front line staff, mystery shopping, or in-depth reviews.
Our culture will be to ask the difficult question, the ones that sometimes regulators have shied away from, of you, of ourselves, of consumers’ behaviour.”
As I have explained, however, he failed to ask the “tougher questions” essential to “discover what [causes bank] failures.” He is imprisoned by his dogma in the old, failed paradigm.
“Mystery shopping” is the term used in the UK to describe sending government testers posing as customers into firms. The U.S. has used this technique to document the high frequency of racial discrimination in housing and widespread fraud by for-profit educational programs. The FSA should be congratulated for using mystery shopping in 2005 to investigate liar’s loans, but the failure of these investigations demonstrates another example of the crippling effects of regulators who do not understand elite fraud schemes. The mystery shoppers did not actually go to the loan brokers. Fraudsters are typically far more reticent in such circumstances because they cannot judge the customer as well over the telephone. Brokers also do not have to engage in the crude fraud schemes in their initial telephone contact with a potential customer. The mystery shoppers, as one would expect, found relatively few of the immediate, crude encouragement to engage in fraud that the mystery shoppers were asked to report. The hard question that Wheatley should have asked was why a methodology he plans to rely on missed massive fraud. (The mystery shoppers’ report on the appropriateness of the brokers offering them liar’s loans was even weaker because of the FSA’s fatally flawed analytics. See: The sale of self-certification mortgages – mystery shopping results. FSA, 2005.)
Wheatley’s discussion of failed orthodoxy is distressing because he does not understand how fully he remains in the grip of a failed orthodoxy that trivializes bank control frauds.
“Today I want to talk to you about how we intend to deliver regulation in future, moving away from a reliance on orthodoxies that have failed. I want to explain to you the cultural change that is needed in firms and at the regulator….
The regulatory model had failed – not just in the UK but globally. The standard orthodoxy – from J.M. Keynes through to Alan Greenspan and others – was that people make rational decisions when given sufficient information; that markets are self-correcting organisms; and, from a regulatory rather than an economist’s perspective, that if you oversee the distribution channels – banks in many cases – the right products get to the right people.
All three orthodoxies failed.
First, people did not make rational decisions. They bought products they did not understand (structured products); assumed the future would always be like the past (house prices); and allowed others to do the homework, which they blindly followed (credit ratings). Did you know that, at the beginning of 2007, only 14 corporates carried a triple-A rating yet over 60,000 structured products did so?
Second, markets did not self-correct – or at least not in the short enough time frame to prevent substantial losses. Risk and credit were significantly underpriced, and the housing bubble was falsely elevated by the weight of securitisation money searching for high credit ratings.
Third, the regulation of firms was not able to overcome the inherent conflict of interest that arises in financial transactions. [Payment Protection Insurance] PPI is a clear example of this – hugely profitable to firms; of limited value (most of the time) to individuals.”
Wheatley is correct that the neo-liberal orthodoxy failed – again – as it has failed in every modern financial crisis. He is incorrect that Keynes always assumed rational behavior. Keynes famously spoke of “animal spirits.” Fraud does not require irrational behavior. Purporting to rely on facially absurd credit ratings can be a rational fraud strategy.
It could be a critical breakthrough if the British regulators recognized that the financial markets (again) did not self-correct on a timely basis. “Private market discipline” once again proved to be an oxymoron. The lenders funded the accounting control frauds rather than disciplining them. As I discuss below, however, the BOE is planning to increase its reliance on private market discipline.
If there is an “inherent conflict of interest in financial transactions” – if cheaters prosper – then there will be a powerful Gresham’s dynamic that can lead to endemic control fraud. The banks that initially pushed the scandal that was PPI gained such a competitive advantage over their honest competitors that pushing PPI became the norm. (PPI is an example of “anti-purchaser” control fraud rather than accounting control fraud. Accounting control fraud produces fictional short-term reported profits. Anti-purchaser control frauds produce real profits.) Only the regulators and prosecutors can break such a Gresham’s dynamic. Wheatley’s policy answer to such frauds is to assume away a conflict of interest he describes as “inherent.”
So for all three reasons – we need to develop a new orthodoxy and a new regulatory approach.
How can we start to move the model forward?
I want the culture in your firms, from your product governance to your sales, to be aligned with the best interests of your customers.
If Wheatley is correct that the conflict of interest between banks and their customers is inherent, then banks will not align their interests with those of their customers. They will exploit the conflict of interest absent an effective regulatory or prosecutorial bar. Wheatley has also forgotten the inherent conflict of interest between the officers who control banks and the banks’ shareholders in the accounting control fraud context.
The BOE is actually worse than Wheatley on the subject of accounting control fraud. The Wall Street Journal had a lengthy article on the BOE’s plan to reform banking regulation. The only way to show the full context of the BOE’s advocacy for its new plan is to quote the November 17, 2010 article (“BOE wants to be less intrusive”) at length.
“The Bank of England plans to adopt a less-intrusive approach to overseeing U.K. banks when it takes over the role of Britain’s primary financial supervisor in 2012, according to people familiar with the matter.
Central-bank officials in recent weeks have privately told bankers that they will no longer deploy armies of examiners to pore over banks’ books and demand reams of detailed information, abandoning an approach backed by the current regulator, the Financial Services Authority.
Instead, the Bank of England—which will take over the FSA’s responsibilities under a new regulatory structure devised by the coalition government—intends to place a greater emphasis on understanding macroeconomic issues and on requiring the banks to disclose more information to the markets, these people said.
The Bank of England has been telling industry executives it plans to be “less in their hair at a detailed level” and that there will be “more market discipline in the equation” by increasing the amount of information banks release publicly, said a person familiar with the matter.
On its face, the shift represents an unexpected retreat from the U.K.’s recent in-your-face policing of the financial sector. It could prove controversial in a country where distrust of banks runs high following the financial crisis.
But Bank of England officials believe the new tack will be more effective than the FSA’s current approach and will mesh neatly with the central bank’s responsibility for monetary policy and for spotting potential systemic risks before they reach critical mass.
One of the first decisions by the U.K.’s coalition government, which came to power in May and is headed by the Conservative Party, was to announce the dismantling of the FSA. Starting in 2012, responsibility for supervising the financial sector will fall to a newly created unit of the Bank of England.
The FSA’s aggressive oversight of the industry is a recent phenomenon. Until the financial crisis hit, the agency had prided itself on regulating with a light touch, which helped lure companies to London. But the near-implosion of the U.K.’s banking system in 2007 and 2008 exposed shortcomings in the FSA’s hands-off approach.
While trying to reinvent the discredited agency in 2008, Chief Executive Hector Sants announced a new era of “intensive supervision” in which the FSA would proactively intervene in banks’ affairs when they engaged in risky behavior.
Recently, though, Bank of England officials have revealed plans for significant shifts.
In a private meeting with senior industry executives late last month, a top Bank of England official, Andy Haldane, said the new regulator will curtail the FSA’s practice of dispatching dozens of examiners to banks to collect loads of granular information, according to people who attended the meeting in the central bank’s imposing stone headquarters.
Mr. Haldane noted that the industry finds those visits frustrating and time-consuming, and that they rarely yield much useful information for regulators, who can find themselves overwhelmed by the quantity of data, these people said.”
The reality is the opposite of Mr. Haldane’s claims. Examinations, investigations, knowledge of fraud techniques, and understanding of imprudent risks are the primary areas in which regulation can add value. The only reliable means of determining a bank’s asset quality and discover accounting control fraud prior to disaster is detailed examination. Regulators are the only “control” that can truly be independent in the face of control frauds who create a Gresham’s dynamic to suborn the supposed independent controls that they hire (and fire). UK banks are not upset because examinations “rarely yield much useful information” but because they provide the most useful (and distressing) information about their losses and insider abuses. The worst UK banks are desperate to kill effective supervision. The claim that regulators are “overwhelmed” because they get data on the asset quality of a reliable sample of the banks’ loan portfolios is ludicrous. Adequate sampling leads to reliable extrapolation that allows regulators to develop a sound understanding of major portfolio categories. That simplifies, not complicates, the regulators’ analysis. It also provides invaluable, truly independent data to honest bankers. The BOE’s anti-examination plan is criminogenic.
Wheatley has made a promise to the banks similar to these BOE promises. This is the unintentionally hilarious first sentence of a press report on Wheatley’s October 16, 2012 “warning” to the City of London’s financial firms.
“The City was warned today that while the new regulator will visit financial companies less frequently than before, it will come down on them fast should they misbehave.”
Right! The FCA won’t examine and get the facts it needs to discover fraud (which it is has shown itself incapable of recognizing even when it becomes endemic), but it “warns” that it will come down “fast should they misbehave.” (The euphemisms for frauds by financial elites are as endless as they are harmful. Camus showed that to deal with a plague we must be honest in naming it.)
Wheatley acknowledged that once the FSA abandoned its deliberate policy of abandoning its regulatory duties it produced the information that led to a small number of convictions, albeit not the senior officers whose liar’s loans fraud scheme drove the crisis.
“Wheatley praised the FSA in some areas, including its 20 criminal convictions since 2009. But he said there would be changes which would make the FCA ‘more forward-looking, better informed’ and with ‘a greater appetite to get things done’.”
The FCA will be less informed because it plans to reduce examinations.
“Wheatley said the FCA would not monitor firms as closely as the FSA. “Fewer firms will have regular direct contact with supervisors, as we shift resources to deal more quickly and effectively with emerging issues, and run more cross-industry projects to get to the root cause of problems.”
He said a new department would be created acting as “the radar of our new organisation — combining better research into what is happening in the market, and analysis of the risks to our objectives.”
Wheatley also makes it clear that the FCA wants to take more pre-emptive rather than reactive action. He knows he can never root out all the crooks, but if he can deter them more than the FSA did that would be a sound start.”
The FCA, like the BOE, plans to rely on data submitted by the banks. Accounting control fraud makes such data totally unreliable. The worst banks report the greatest profits – right up to the point they collapse. They pass stress tests with flying colors. The quants and their models got everything important wrong because they did not understand accounting fraud. Accounting control fraud is all about deceit. Frauds are stealthy and the FCA’s radar will find them invisible. The quant’s complacency produces regulatory failure.
More recent BOE statements have made clear its lack of understanding of accounting control fraud and the fact that it plans no major effort against accounting control fraud or the systemically dangerous institutions (SDIs) that dominate the City of London and endanger the global economy. In May 2011, the BOE described its plan for its Prudential Regulation Authority (PRA).
“42. The PRA will need to have access to sufficient accurate information to enable it to form an independent judgement of the key risks to financial stability posed by a firm. The PRA will periodically validate firms’ data, either through onsite inspection by its own supervisory and specialist risk staff or by third parties.
43. The PRA’s onsite inspections will not be able to uncover all instances of malpractice. In this sense, the PRA will not seek to be a ‘fraud regulator’: this role is filled by other authorities.
Disclosure and market discipline
The PRA will look to the market — to a firm’s shareholders, debt-holders and counterparties — as well as the firm’s senior management and its board of directors, as a key source of discipline to promote prudent behaviour in firms.”
The BOE, following a crisis that even the FCA admits was driven by massive mortgage fraud induced by lenders and their agents, does not plan to even try to be a “fraud regulator” because “this role is filled by other authorities.” What authorities would those be? Notice that the BOE intends to increase its reliance on private market discipline and rely primarily on data provided by the banks. It does not even promise to “validate” those data through bank examiners. It apparently wishes to privatize the function, presumably through hiring outside audit firms. Those firms have a pathetic record in spotting accounting control fraud, even when the fraud is endemic and the bank is massively insolvent. The BOE cannot “validate” bank data if it does not intend to “seek to be a ‘fraud regulator’?”
The Labour Party so destroyed UK (and global) financial regulation and the economy that the Conservative Party and Lib-Dems had to work hard to make things far worse. Unfortunately, the coalition has proven up to that task. They are sowing the seeds for the next financial crisis and they have thrown the nation back into a gratuitous recession.
Bill Black is the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.
Bill writes a column for Benzinga every Monday. His other academic articles, congressional testimony, and musings about the financial crisis can be found at his Social Science Research Network author page and at the blog New Economic Perspectives.
Follow him on Twitter: @williamkblack