I discussed this on Radio 2 yesterday.
Listen again, here.
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This was an interesting programme. Those of us who worked closely on the analysis of the MBS bundled sales were convinced that there was collusion, misrepresentation and fraud. If you saw the evidence as an auditor, Richard, you would also agree. Not only were the MBS incorrectly valued, the same individual contracts were included in more than one bundle – hence sold to more than one buyer.
The complex contractual structure also virtually ensured that the buyers, once aware of the reality, had very little means of redress. Incidentally, it also gives the original home-loan borrower, the opportunity to default with impunity.
It would be interesting to hear Nick Leeson’s viewpoint after his jailing following the collapse of Barings Bank, where he was the sacrificial pawn.