Photo: By trackrecord on flickr
In an interview with the FCIC for its investigation into what caused the financial crisis, Ben Bernanke spoke about how badly U.S. banks needed to be bailed out.Which banks would have made it through the crisis and which wouldn’t has always been speculated about, but we’ve never really known for sure how many banks were solid, how many were insolvent. We know there was at least one because all of the banks had to take TAF money from the Fed because otherwise the other banks would be “stigmatised.”
We’ll probably never know which U.S. bank wouldn’t have failed with 100% certainty, but Bernanke told the FCIC that there was only one.
All of the rest were at risk — even Goldman Sachs, despite what they’ve said a number of times.
From the Telegraph:
“If you look at the firms that came under pressure in that period… only one… was not at serious risk of failure,” Mr Bernanke told the commission. “Even Goldman Sachs, we thought there was a real chance that they would go under.”
Obviously he’s not talking about Citi. Its most likely not Bank of America. The most likely bank he’s hinting about is JPMorgan. Both Goldman and JPMorgan have made it seem like they didn’t need any government money, but clearly Goldman did.
For more coverage on what the FCIC’s investigation into what caused the financial crisis uncovered, click here >