Commercial banks and financial group (partakers, victims, survivors, rescuers)
Role: offering mortgage loans to house buyers; offering capital to mortgage companies; purchasing, making and repacking various mortgage credits and bonds. Due to the close connection between their multiple businesses and the real economy, commercial banks can make mergers and acquisitions even after surviving large-scale offset and economic losses.
End: abusing financial derivatives, allowing financial products like secondary mortgage loans to operate in total isolation from the real economy.
Representative: Wachovia (partaker and victim)
End: sold to Wells Fargo
Person: former CEO Ken Thompson, fired due to huge financial losses and replaced by former vice minister of Treasury Department Robert Steel.
Representative: JPMorgan Chase (partaker, survivor and rescuer)
End: purchased Bear Stearns Cos, and all the savings, assets and specific debts of Washington Mutual Bank.
Person: CEO James Dimon (one of the few bankers in the Wall Street whose wealth has increased during the turmoil)
Representative: Bank of America (partaker, survivor and rescuer)
End: purchased Countrywide Financial and Merrill Lynch & Co.)
Person: CEO Kenneth Lewis. The Merrill Lynch purchase has been considered the most risky gamble in his career.
Representative: Wells Fargo (partaker, survivor and rescuer)
End: purchased Wachovia
Person: Chairman Richard Kovacevich. It is said that Kovacevich held dissenting views about the government’s injection of funds.
Representative: Citigroup (partaker, survivor and rescuer)
End: purchased part of ACC Capital Holdings businesses, lost to Wells Fargo in the competition for Wachovia.
People: former CEO Charles Prince who resigned at the end of 2007 due to huge economic losses; Vikram Pandit who is said to have shown no interest in the proposal to buy Goldman Sachs.
Other financial institutions such as insurance companies and fund companies
Role: purchasing various secondary mortgage loans and bonds as an investment and offering insurance to cover these financial derivatives.
Fault: secondary mortgage loans account for a massive part of their business, a risk that leaves them hugely vulnerable.
Representative: AIG
Person: Joseph Cassano, former chairman of AIGFP,
End: received more than 120 billion dollars from Federal Reserve to salvage business and was taken over by the government.
Rating agencies (pushers, victims)
Role: offered supposedly reputable evaluations of credit status of financial products and financial institutions
Fault: lowering rating standards to boost market share; providing groundlessly optimistic ratings on financial products such as mortgage loans and bonds.
Representative: Moodys, Standard & Poor’s, Fitch
End: ratings requests on mortgage loans and bonds have plummeted. Rating agencies have lost both profits and reputation.
