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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (110629)	1/20/2008 2:17:34 AM
From: Madharry	Read Replies (2) of 132070

I think the problems in the financial arena are magnified from what they were a decade ago when I worked for banks. Lenders were paid salaries and bonuses based on how much business they brought in as long as they didnt do things that were against the banks written policies. I every bank I worked for the credit departement was completely subservient to the chief lender, who paid almost no attention to the credit analysis. I concluded that for the most part it took several years for a loan to go bad and by that time the primary lender had either been promoted out of the department or had taken a better job with another bank. the bad loan was sent to the workout area and rarely mentioned. Now since ceos and all the way down earn great bonuses based on profits earned and banks sell their loans requently without recourse that has been even more incentive to game the system by making more and more bad loans and then shoring them until its impossible to do so anymore and then taking huge one time write downs. the ceo then collects his $100 million severance package and everything is huncky dory.

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