I should know

Dick Kovacevich on Banks and This Financial Crisis

If all banks, especially those who call themselves “banks” but are really stock and investment houses, legalized casinos that allow us to take a risk in hope of financial rewards such as Bear Stearns, Lehman Brothers, Goldman Sachs, Morgan Stanley, Merril Lynch, would have acted in the same conservative manner as Wells Fargo & Co in NOT hawking, buying and selling derivatives and other highly risky investments, and did NOT do Option ARMS, and did a limited amount of subprime loans with good underwriting standards and caps on all overages at 150 basis points versus the unlimited and average amount of 600 basis points, we would probably NOT be in this financial meltdown. Sure, Wells Fargo & Co did plenty of loans that they probably shouldn’t have done, but a minute percentage as compared to most other major mortgage lenders.