Grilling the Wall Street Banks

Here's an interview with William Black, a key investigator on the Savings & Loan scandal. From Yahoo Finance:



The commission "is the equivalent of the National Transportation Safety Board after an airplane crashes," Black tells Henry Blodget in the accompanying clip. "You go and find the black boxes because they have the critical information," adds Black, now an associate professor of economics and law at the University of Missouri, Kansas City. Black was a former senior bank regulator and prosecutor during the savings and loan crisis of the late 1980s.

"The financial equivalent to the black box is getting the email trail, the losses trail, the compensation trail" from the financial institutions, Black says. "All of this is readily available in institutions we the taxpayers own -- AIG, Fannie, Freddie and other institutions."

Whether the commission will have the political muscle to access and subpoena such documentation is a matter of political will, Black says.

Bigger picture, the hearings this week and the commission's work will be an opportunity to shed light on what happened a year ago. As Black has said previously on Tech Ticker, the FBI blew the whistle as early as September 2004 on "an epidemic of mortgage fraud." More than five years later, no major figures have gone to jail for fraud related to the crisis.

The timing for the commission's hearings was prescient. The outcry over Wall Street bonuses for '09 is swelling this week -- a year after the bailout of major financial institutions at taxpayers' expense.

So what should the commission's message to the financial industry be? "The message is real simple. "Put up or shut up," Black says. "Give us all the information. Give us the analyses, the emails ... no self-serving releases."