According to Matt Taibbi of Rollingstones, New York attorney General Eric Schneiderman is about to do some serious damage to the major banks by running an investigation into dealings during the financial crisis. The three companies under focus are Morgan Stanley, Bank of America, and Goldman Sachs. This investigation will attempt to figure out if the banks were aware of the loans’ toxicity when they packaged them into securities and sold them to investors.

MY TAKE

Although it seems like a very positive development, unfortunately I don’t believe this will result in satisfactory retribution. First of all, going back to those times, it will be very difficult to prove that the banks knowingly took risky loans and passed them on to investors. Unless they find ample testimony and written proof, how will they know if consumers were intentionally sold bad loans or if it was just a case of blind risk taking. Keep in mind, from consumers to lenders to Wall street all thought that this ride would never stop, and when it did everyone was in for a rude awakening.

I want to put an end to the idea that this was a plan by Wall Street to screw over investors. Keep in mind, the companies’ reputations are on the line when people invest with them, and they can seriously damage their well being with acts like that. Now having said that, do I believe they had an idea before most of the public that they had gone too far, of course they did! Once they realized it was too late, they had no choice but to let investors and tax payers take the heat for the extreme risk taking.

Was this completely immoral? Yes. Do they deserve being punished for this? No, I don’t think so. I know this may sound crazy to liberals, but you have to understand it was lack of oversight that led to this mess. The idea that there should not be any regulation is what caused this catastrophe. A business will do what it can to maximize profit. If we claim to be a capitalistic democracy, we have to let business operate within the rules. We should not expect moral judgement from business. The answer lies in making the laws tough enough to prevent this from occurring.