– Want to know who some of those responsible for the current economic mess are?  Read the following.
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The top 25 US originators of subprime mortgages – the risky assets that sparked the global financial crisis – spent almost $370m in Washington over the past decade on lobbying and campaign donations as they tried to ward off tighter regulation of their industry, an investigation has shown.
The study, which will be released today by the Center for Public Integrity, a non-profit investigative journalism organisation, is likely to strengthen public calls for much tougher financial regulation in the US.
It shows that most of the top 25 originators, most of which are now bankrupt, were either owned or heavily financed by the nation’s largest banks, including Citigroup, Goldman Sachs, Wells Fargo, JPMorgan and Bank of America. Together, they originated $1,000bn in subprime mortgages in 2005-07 – almost three-quarters of the total.
The banks, which have received the vast bulk of the $700bn in troubled asset relief funds issued since last October, also supported the lobbying effort to prevent tighter regulation of the subprime market.
Nine of the top 10 lenders were in California, one of the states badly affected by the housing crisis that emerged after a surge in lending to riskier, or subprime, borrowers, many of whom were forced to foreclose.
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