How Are the Banks?

The story of our economic crisis mirrors every great market bubble in history. Clearly, banks were key participants, but they were not alone. Mortgage lenders, borrowers, regulators, policy makers, appraisers, rating agencies, investors and investment bankers all played a role in pushing economic excesses forward. The institutions that gave in completely to the frenzy are no longer with us. Those that balanced the need to compete with the need to lend prudently survive today and are helping to stabilize the system.

via Kenneth Lewis Says Bank Nationalization Would Undermine Confidence in the Financial System – WSJ.com.

The stock market is happy happy happy that Citigroup is making a profit. But how are the banks, really? When I read the quoted article, I suspected that it was self serving. There are plenty of commentators dwelling on the “bank problem”. They may not have the incentive to paint such a rosy picture – and they don’t. On the other hand, they don’t run banks. They’re not on the inside. I certainly don’t know the answer – but it does seem to me that bank bigshots, who have the government camped out in the foyer, aren’t likely to cook to books or issue misleading statements or do anything else that will get them indicted. I’m starting to get the feeling that, with the bank crisis, we are seeing the beginning of the end rather than the end of the beginning.

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