Raghuram Rajan, now the head of India's central bank, once wrote an academic paper blaming the financial crisis on poor people. Just yesterday, Bill Clinton placed blame for the crisis on our government. Anyone who has seen the Oscar-winning documentary Inside Job knows full well that the crisis was caused by our banks.

Banks lent trillions of dollars to home buyers on too loose of terms knowing that they could turn the resulting junk mortgages into AAA securities through the alchemy of CDOs and securitization and thus generate hundreds of billions of profit and leave the resulting mortgage mess to their investing clients.

But the financial crisis is behind us, right? Why would Wall Street shower Hillary Clinton with millions of dollars in speaking fees and tens of millions in campaign contributions?

I think it is an insurance policy. Wall Street wants a friend in the White House to protect the status quo, and if they can't get a Republican elected, Hillary is the next best thing. I think they need a friend in government because the industry could not survive an investigation into how they actually make their profits.

Wall Street doesn't want you to know how they make their money. A brief review of how Wall Street bankers earn their outrageous fees and bonuses will highlight why they don't want to see a reformer like Bernie Sanders succeed.

Advising people on where they invest their money is one of Wall Street's biggest businesses. Actively managed mutual funds can charge 2% per year for this advice. But, Nobel Prize winner Eugene Fama has shown empirically that these mutual funds do no better with their stock picking than throwing darts at a stock page.

If you pay your Wall Street advisor 2 percent per year for fairly worthless advice, by the time you retire in 30 years, he will end up with almost half of your savings. No wonder the bankers' boats are bigger than the clients' boats in Sag Harbor.

Or you can give your money to a hedge fund that typically charges even more, 1.5 percent per year plus 20 percent of the upside. Again, empirical academic studies have shown that on average, hedge funds do not outperform the general market.

Of course, each year, some hedge funds report unusually good performance. This might be due to luck, but the fact that the same hedge fund names keep showing up at the top of the rankings suggests something else is going on.

The top 25 superstar hedge fund managers earn about $1 billion per year each personally. And, thanks to the carried interest rule, they pay lower tax rates on this windfall than a teacher making $30,000 a year.

Americans like to think that we are a meritocracy and if someone can create billions of profits they deserve a big pay day.

But that presumes these hedge fund managers are playing fairly and by the rules. Their very performance violates everything modern finance professionals know about the efficiency of markets. How do they do it? I think it is a combination of insider trading, market manipulation and high frequency or very fast trading that allows them to see your orders before placing theirs.

I say "I think" because I can't prove it. Why? Because these folks have contributed millions to your congressmen to make sure that hedge funds remain unregulated and do not have to file detailed financial reports with the SEC.

Another Wall Street business that remains highly unregulated is the $690 trillion derivatives market. Bankers believe that the derivatives market makes the world safer because it allows people to share risk. What they don't see is the enormous domino effect caused by interlocking derivatives as one side of each derivative contract fails during a financial crisis. Interlocking derivatives assures that when one major bank gets in trouble, the entire global financial system is threatened.

Anyone, like Hillary Clinton, who thinks Dodd-Frank solved all the problems of the last financial crisis has a big surprise coming.

Banks are still highly leveraged with enormous debt on their balance sheets. They even ignore more than half their assets in calculating their leverage under their risk-weighted asset approach.

If a bank is leveraged 30 to 1, which means it funds itself with $30 of debt and deposits for every one real dollar of equity capital raised from shareholders, then to remain solvent, bankers have to make 30 good loans for every one bad loan. I never met a banker who could make five loans without one getting into trouble.

Banks are bigger and more concentrated than ever. Bernie says he wants to break up the banks. Not just because they are too big to fail, but because they have gotten to be too big to manage.

I think breaking up the banks is a great idea. And I think it will unlock huge untapped value inside these monolithic institutions. If JP Morgan broke into twenty banks, JP Morgan Asia, JP Morgan Europe, JP Morgan Hi-Tech, etc., I am fairly certain the sum of the new entities' share values would far exceed the value of the old JP Morgan.

Banks not only caused the most recent global financial crisis, they have had their hands in every recession, crisis and depression you can think of.

The great depression of 1929 could not have happened without the crazy margin lending of the banks to stock speculators. The farm crisis of the 1980s was caused by banks overly-aggressive lending to farmers. The commercial real estate bust in 1990 was preceded by no-money-down bank loans to real estate developers. Japan's 1994 collapse was fully funded by the dramatic growth of bank lending to corporations and real estate speculators. The high-tech crash of 2000 was caused by bankers willingness to let their research analysts profit from investment banking business they generated. The housing crash of 2007 was preceded by a housing bubble created by bankers willing to do stupid, no down payment, no job, no documents, no proof of income mortgage loans for 99 percent of the value of a home. Why would a buyer care what price he was paying for a house -- it wasn't his money, it was the bank's.

Why is it that the banking industry keeps getting in trouble? Why, in retrospect, do they seem to keep doing stupid loose lending? And why must they be more highly regulated than other industries, a concept completely lost on Hillary and the Republicans?

It is because, like the properly regulated insurance industry, banks deal in very long-life maturity assets and liabilities. Banks can mis-price risk and do stupid lending for a long time, and it appears profitable, until a recession hits and the true cost of all the bad loans they have amassed hits the fan.

This is why government reform and regulation is required in the banking industry. Because, if one bank does stupid loose lending, all their competitors have to join them or else watch their market shares immediately head to zero. This is what the ex-CEO of Citibank was referring to before the crisis when he said, If the music is playing, you have to keep dancing.

Bernie Sanders understands that Wall Street needs to be regulated, for its own good, but also for the economic health of the country. And that is why Wall Street will spend millions on Hillary in her attempt to keep the status quo.

The author teaches finance at the SP Jain School of Global Management in Dubai and Singapore and previously worked ten years for Goldman Sachs as an investment banker in New York. He has written nine books on economics and finance that predicted the entire global financial crisis.