Financial Crisis Monitor

Derivatives are invented securities such as futures contracts, collateralized debt obligations, and credit-default swaps that are related to real assets or events but have no inherent value of their own.
They have legitimate uses, such as allowing airlines to hedge against wild swings in energy prices, so they can better control costs.
But derivatives are [...]

Arthur Wilmarth, law professor at George Washington University, believes the OCC, along with the Office of Thrift Supervision, had a lot to do with why subprime loans became as big a problem as it did, by taking the power to supervise banks away from the states.
Lisa Madigan, the attorney general of Illinois, said in [...]

Complicated portfolios made up of subprime mortgages, known as collateralized debt obligations, or CDOs, received the stamp of approval from rating agencies, but turned out to be a contagion that wreaked havoc on the global economy.
Lawmakers are now asserting that credit rating agencies (CRAs) like Moody’s Investors Service and Standard and Poor’s Ratings Services failed [...]

Confirming what most analysts knew, both before and after 2007, a Senate panel investigating the causes of the nation’s financial crisis on Thursday unveiled evidence that credit-ratings agencies knowingly gave inflated ratings to complex deals backed by shaky U.S. mortgages in exchange for lucrative fees.
The Senate Permanent Subcommittee on Investigations will hold a detailed hearing [...]

Senior SEC staffers spent hours surfing pornographic websites on government-issued computers while they were supposed to be policing the nation’s financial system.
California Rep. Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, said it was “disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking [...]