Since 1999 the chief risk officers of the Wall Street banks that blew themselves up in 2008 because of reckless and irresponsible risk practices have been meeting in secret and calling themselves the Counterparty Risk Management Policy Group (CRMPG). Their plan was to periodically release erudite-sounding reports to regulators suggesting that Wall Street could police itself under a set of “Guiding Principles” in order to perpetuate its off balance sheet debt bombs, unregulated OTC derivatives and a self-regulation regime.
The group was led by former New York Fed President E. Gerald Corrigan who then moved on to a lucrative career at Goldman Sachs.
Representatives from banks like Lehman Brothers, Citigroup, Bear Stearns and Merrill Lynch sat on key committees of the Group and helped to formulate the “Guiding Principles” for Wall Street. Lehman Brothers filed bankruptcy on September 15, 2008 – just five weeks after a report from the group on managing risk was released. One day before the Lehman collapse, Merrill Lynch had collapsed into the arms of Bank of America. In March of that year, Bear Stearns had already collapsed into the arms of JPMorgan Chase with a generous financial assist from the Fed. In the same year, Citigroup became insolvent and received the largest taxpayer bailout in U.S. history.
Notwithstanding the hubris of these risk managers lecturing others on how to contain risk while their own institutions are in the process of an epic collapse because of negligently managed risk, the Federal Reserve actually deferred to this group at the peak of the crisis in 2008....Wall Street On Parade
Meet the Secret Wall Street Group Whose Fingerprints Are All Over the 2008 Crash
Pam Martens and Russ Martens
