“Lehman, for instance, doesn’t do commercial banking. Nor does Fannie and Freddie. Nor did Bear Stearns. Really there is no major link here.”
Wow. You’re kidding? I need more info on this. This crisis is the greatest financial issue of my life— I want to know it’s TRUE roots.
SJB: You want answers?
Barney Frank: I'm think I'm entitled.
SJB: You want the truth?
Barney Frank: I want the truth!
SJB: You can't HANDLE the truth!!
SJB: Son, we live in a world that has liberals. And those liberals have to be fought by everyone who loves freedom and prosperity. Who's gonna do it? You? You, Chris Dodd? Conservatives have a greater responsibility than you can possibly fathom. You weep for careless, irresponsible mortgage borrowers and you curse sound lending practices. You have that luxury. You have the luxury of not knowing what I know: that sound underwriting and credit practices, while inconvenient, saves our economy from ruin. And the existence of sound, well-capitalized banks, while grotesque and incomprehensible to you, is essential to a free and prosperous economy...You don't want the truth. Because deep down, in places you don't talk about at Georgetown parties, you want those banks there. You need those banks on that wall.
We use words like down payment, income verification and credit history...we use these words as the backbone to a safe and sound financial system. You use 'em as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the economic system which the free market provides, then questions the manner in which the free market provides it! I'd rather you just said thank you and went on your way. Otherwise, I suggest you buy a defaulted mortgage and save us some dough. Either way, I don't give a damn what you think you're entitled to.
SJB: Did you order the banks to lower their credit standards?
Barney Frank: (quietly) I did the job the Rats sent me to do.
SJB: Did you order the banks to lower their credit standards??!
Barney Frank: You're goddamn right I did!!
The investment banks that also did commercial banking are actually doing alright: Bank of America, Citigroup, and JPMorgan Chase.