Top banking industry executives are striking back against the surge in populist outrage. Dick Parsons, the Chairman of Citigroup (C) and former CEO of Time Warner says it’s not right to just blame bankers for the financial crisis.
AP: “Everybody participated in pumping up this balloon. Now the balloon has deflated,” he said Monday. “Everybody, in reality, has some part of the blame. But it’s much more in the culture to find a villain and vilify the villain.”
Besides banks, there was reduced regulatory oversight, loans to unqualified borrowers were encouraged and people took out mortgages or home-equity loans they couldn’t afford.
He’s unquestionably right. Lots of people were greedy during the boom, and continue to be now. See yesterday’s story about homeowners cheating the loan modification scheme. This idea that Wall Street “greed” somehow caused this mess is silly, since greed, broadly defined, has always been pervasive in various industries in and out of finance.
On the other hand, while everyone is greedy, bankers had their greed amplified with 15x leverage. And either way, we don’t think these complaints will get Parsons or anyone else on Wall Street very far.