Bill Black Bill Black is an associate professor of economics and law at the University of Missouri – Kansas City (UMKC). He was the executive director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. He was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel at the Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of “control fraud," in which the CEO or head of state uses the entity as a “weapon.” Control frauds cause greater financial losses than all other forms of property crime combined and kill and maim thousands. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae’s former senior management. He is the author of The Best Way to Rob a Bank is to Own One.

Bill Black to BofA Chairman: Racist bank adviser in Germany must go

Bill Black’s letter to BofA Chairman Walter Massey calls for the immediate firing of Hans-Olaf Henkel, the bank’s Senior Advisor in Germany, over issues of bigotry. Black blasts Henkel as one of the chief architects of the global financial crisis — and a dangerous hate-mongerer.

From William K. Black, Associate Professor of Economics and Law, University of Missouri - Kansas City

Re: Hans-Olaf Henkel, Bank of America’s Senior Advisor in Germany

Dear Dr. Massey,

I am writing in my individual capacity. It came to my attention yesterday that Bank of America’s “senior advisor” in Germany is Hans-Olaf Henkel. I believe that Bank of…

Testimony Reveals Need for Thorough Investigation of AIG Deals

William Black calls for a deeper investigation of the conflicts of interest that shaped the AIG bailout.

The truly extraordinary disclosures were that Paulson, Bernanke, and Geithner all purported to have had no involvement in one of the most expensive decisions in history — the decision to pay 100 cents on the dollar to the least deserving of recipients (and who, if Geithner’s testimony were to be believed, did not need to receive that largess) — and the unprincipled and indefensible decision to try to get AIG to cover up that fact and the beneficiaries of that largess. Indeed, Bernanke testified…

Anti-Regulators: The Federal Reserve’s War Against Effective Regulation

Roosevelt Institute Braintruster William Black warns that the Fed’s failed leadership on regulation could lead us over another financial cliff–more catastrophic than the last.

The first decade of this century proved how essential effective regulators are to prevent economic catastrophe and epidemics of fraud. The most severe failure was at the Federal Reserve. The Fed’s failure was the most harmful because it had unique authority to prevent the fraud epidemic and the resulting economic crisis. The Fed refused to exercise that authority despite knowing of the fraud epidemic and potential for crisis.

The Fed’s failures were legion, but five are worthy of particular…

Geithner as Martyr to an Ungrateful Nation: Bo Cutter’s Tragicomic Portrayal of Tim as a ‘Man for all Seasons” (Part 2)

This is the second installment in my comments on Bo Cutter’s essay defending Treasury Secretary Geithner. Bo was a managing partner of Warburg Pincus, a major global private equity firm and led President Obama’s Office of Management and Budget (OMB) transition team. He was Bob Rubin’s deputy at the National Economic Council. The first installment discussed Bo’s extraordinary indictment of the finance industry.

Bo views Geithner as a martyr subjected to unfounded, ungrateful attacks for his actions that prevented the Second Great Depression. Bo doesn’t have much use for Americans that are upset with the senior managers of the finance industry. (This…

Fraud and Failure: Bo Cutter’s Indictment of the Finance Industry (Part 1)

Bill Black explains how Bo Cutter’s defense of Tim Geithner reveals the  fraud and failure that plagued the financial sector  long before the crisis.

Bo Cutter has presented the best possible defense of Treasury Secretary Geithner.

It is a remarkable defense because it is premised on a scathing indictment of Wall Street, theoclassical economics, modern finance, and the sycophants that the financial community installed as anti-regulators. Indeed, Bo’s account is sometimes particularly credible because it is a confession. Bo was a managing partner of Warburg Pincus, a major global private equity firm and led President Obama’s Office of Management and Budget (OMB)…

Why is Obama Championing Bush’s Financial Wrecking Crew?

Bill Black lays out a near-term list of financial priorities. Item #1: Team Obama must be purged of the ‘Wrecking Crew’ who drove the economy over a cliff.

Tom Frank’s book, The Wrecking Crew explains how the Bush administration destroyed effective government and damaged our social fabric and our economy. The Obama administration has chosen to reward two of the worst leaders of Bush’s crew — Geithner and Bernanke - with promotion and reappointment. Embracing the Wrecking Crew’s most destructive members has further damaged the economy and caused increasing political and moral injury to the administration.

Last week was a bad one for…

Animal House Rules: Treasury Proposes to Use DOUBLE SECRET PROBATION

Countdown to the next crisis? Bill Black uncovers the dangerous fantasies lurking in the proposed bill to respond to systemically dangerous institutions — ‘ticking time bombs’ waiting to explode.

You can never compete with self-parody, and Treasury and the Fed have mastered the art. The proposed legislation to respond to systemically dangerous institutions (SDIs) reveals that the Fed and Treasury are sowing the seeds for the next crisis. But the bill is also wonderfully wacky. The core of the bill is based on the fantasy that the government can (and should) play by Animal House rules and create a secret list of…

New Agenda for America: Is it good for the children?

To mark the 80th Anniversary of the Great Crash of ‘29, we asked 15 progressive thinkers to write about lessons learned and what lies ahead. Together, their reflections constitute a New Agenda for America — a message of how the ideals of a fair society should apply to the economic and social policies of our time.

Our economy is addicted to waste. It wastes human beings. It leaves them unemployed and often impoverished - and it leaves their children in poverty. Of all the things we have come to accept in America, childhood poverty is the most appalling. We can end most…

How the Servant Became a Predator: Finance’s Five Fatal Flaws

Roosevelt Institute Braintruster William K. Black explains how the finance economy preys on the real economy instead of serving it. He shows how both have become dysfunctional and warns that we must not neglect the real economy — the source of our jobs, our incomes, and the creator of goods and services — as we focus on financial reform.

What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in…

Flaws inherent in the current commission, and how to minimize them

Roosevelt Institute Braintruster William K. Black, who investigated the S&L debacle in 1993, explains why a strong lead investigator must be selected as a modern Pecora for the Financial Crisis Inquiry Commission. 

Congress recently passed legislation establishing the Financial Crisis Inquiry Commission (FCIC). The law was a significant accomplishment because it was strongly opposed behind the scenes by many powerful forces, but its design does not meet many of the standards that made the Pecora investigation so successful. A Commission of this nature is unwieldy and political. It cannot be non-partisan, it cannot be unified, and it is extremely difficult to make it effective.…