Although it probably shouldn’t surprise anyone, it’s nonetheless interesting to see a group of International Monetary Fund (IMF) staff have reported (although this is not a statement of IMF policy, necessarily) that the US banks most active in lobbying against regulation of the financial sector are the ones who took the biggest risks over the mortgage and other deals which caused the crisis. Their paper explores the evidence behind the…
“anecdotal evidence [which] suggests that the political influence of the financial industry contributed to the 2007 mortgage crisis, which, in the fall of 2008, generalized in the worst bout of financial instability since the Great Depression.”
And it finds them guilty. Politicians should take note that anti-regulators really should not be trusted, and the paper concludes with a suggestion that financial sector lobbying should be reined in. It would be interesting to see the same work on the activities of those lobbying against regulation carried out in the UK – perhaps the Government’s better regulation unit could be tasked with the job?
See full Press Release.
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