The Banks Did It
豆瓣
An Anatomy of the Financial Crisis
Neil Fligstein
简介
A comprehensive account of the rise and fall of the mortgage-securitization industry, which explains the complex roots of the 2008 financial crisis.
More than a decade after the 2008 financial crisis plunged the world economy into recession, we still lack an adequate explanation for why it happened. Existing accounts identify a number of culprits—financial instruments, traders, regulators, capital flows—yet fail to grasp how the various puzzle pieces came together. The key, Neil Fligstein argues, is the convergence of major U.S. banks on an identical business model: extracting money from the securitization of mortgages. But how, and why, did this convergence come about?
The Banks Did It carefully takes the reader through the development of a banking industry dependent on mortgage securitization. Fligstein documents how banks, with help from the government, created the market for mortgage securities. The largest banks—Countrywide Financial, Bear Stearns, Citibank, and Washington Mutual—soon came to participate in every aspect of this market. Each firm originated mortgages, issued mortgage-backed securities, sold those securities, and, in many cases, acted as their own best customers by purchasing the same securities. Entirely reliant on the throughput of mortgages, these firms were unable to alter course even when it became clear that the market had turned on them in the mid-2000s.
With the structural features of the banking industry in view, the rest of the story falls into place. Fligstein explains how the crisis was produced, where it spread, why regulators missed the warning signs, and how banks’ dependence on mortgage securitization resulted in predatory lending and securities fraud. An illuminating account of the transformation of the American financial system, The Banks Did It offers important lessons for anyone with a stake in avoiding the next crisis.
contents
List of Illustrations*
Preface
1. A Long, Strange Trip
2. From Mortgages to Mortgage Securitization
3. The Rise of the Vertically Integrated Private Banks, 1993–2001
4. Financial Innovation and the Alphabet Soup of Financial Products
5. The Subprime Moment, 2001–2008
6. The Crisis and Its Spread Worldwide
7. Fraud and the Financial Crisis
8. Why Did the Federal Reserve Miss the Financial Crisis of 2008?
9. The Banks Did It (With the Help of the Government!)
Notes
References
Acknowledgments
Index
* Illustrations
Figures
2.1. Homeownership rates for the United States, 1900–2008
2.2. Shares of nonfarm residential debt, 1895–2005
2.3. An announcement of the first MBS issued by Ginnie Mae in 1970
3.1. Residential mortgage origination by type, 1990–2003
3.2. Percentage of securitizations done by GSE, 1980–2001
3.3. Concentration in mortgage lending: top twenty-five market share
3.4. Percentage of all loans that were securitized
3.5. The vertically integrated bank, circa 2001
4.1. Asset-backed securities outstanding over time
4.2. Key institutions surrounding GSAMP Trust 2006-NC2
4.3. Capital structure of GSAMP Trust 2006-NC2
5.1. Residential mortgage origination by type, 1990–2008
5.2. Mortgage originations by purchase and refinance
5.3. Mortgage-related security holdings of four largest investor types, 2002–2008
5.4. Financial profits as a share of all profits
5.5. Amounts of MBS issuance by type for nonagency firms
5.6. Total of collateralized debt obligations and mortgage-related securities issuance, 2004–2008
5.7. Rise and fall of the ABCP market
6.1. Quarterly percentage change in national housing price index and share of subprime mortgages ninety-plus days delinquent or in foreclosure
6.2. Timeline of MBS credit downgrades
6.3. Average magnitude of subsequent Alt-A, B / C, and HEL downgrades by vintage
7.1. Credit-crisis-related settlements, 2007–July 2017
8.1. Ngram for house price bubble
8.2. Number of FOMC meetings where “house price bubble” was a topic, 2000–2009
9.1. Production of MBSs by private-label securities (non-GSE financial institutions) and the. total outstanding MBSs issued by the GSEs, 1999–2018
9.2. Agency and nonagency shares of residential MBS issuance, 1995–2018
9.3. Mortgage debt in the United States
9.4. Government holding of MBSs, 2002–2018
Tables
5.1. Dominant firms in selected mortgage finance segments, 1996 and 2007
6.1. What happened to the main players in the market
6.2. Countries that experienced a banking crisis, 2008–2009
6.3. Foreign countries with the highest amount of MBSs/GDP in 2006 and countries with the highest amount of ABCP/GDP
6.4. Largest banks with ABCP holdings with country of origin
7.1. Loan performance of nonconventional mortgages issued in 2002–2008
8.1. Voting members of the Federal Open Market Committee, 2000–2008