By now you've probably heard the reports. Merrill Lynch (NYSE: MER) CEO Stan O'Neal is being pushed, making him the first CEO of a big investment bank to be held directly accountable for his company's exposure to the subprime debacle. Of course, his clandestine efforts to sell the company without the knowledge of the board didn't help his case.
The Wall Street Journal wonders (subscription required) when Washington will take some responsibility:
And speaking of Washington, that's one place where no one is being held accountable for the subprime boom and bust. That includes in particular the Federal Reserve, whose far too easy monetary policy created a subsidy for debt that fueled the housing and subprime mortgage excesses. One difference between Wall Street and Washington is that in the latter no one ever admits a mistake, much less suffers for it.
This is exactly right. Last week, I wrote about Washington's obsession with increasing homeownership -- seemingly at any cost, even if it meant encouraging mortgages for people who couldn't afford them. The Fed's lax monetary policy combined with this to make a subprime crisis an almost forgone conclusion.
But all that we hear is Congress blustering with calls for investigations and lawsuits against the lenders. They need to look in the mirror.
Merrill Lynch holds someone accountable -- will Washington?
Posted Oct 30th 2007 3:02PM by Zac Bissonnette
Filed under: Merrill Lynch (MER), Politics, Housing
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