Editor’s note: This article was first published in May 2011 as news: US federal prosecutors in Manhattan had sued Deutsche Bank and its MortgageIT unit over FHA-insured loans, and the Bin Laden reference is to his death on 2 May 2011. The case was later settled.
The US Department of Justice has filed a lawsuit against Deutsche Bank, the German banking giant.
The complaint alleges mortgage fraud, and it apparently comes with clear, compelling evidence that during the housing bubble the bank obtained government guarantees for “junk mortgages”, the very loans responsible for the market’s collapse.
Deutsche Bank and MortgageIT lied repeatedly in order to be admitted to a government programme under which their mortgages would be guaranteed by the government. If you sell something “government-backed”, you are selling quality, when in reality the government is advising you to buy junk.
I sincerely hope the United States starts a series of lawsuits against Deutsche Bank‘s peers and competitors, because I am absolutely convinced it was just one of many that profited from the massive indebtedness of the whole world. We are all paying for the serious consequences now, while this sector remains protected and shielded by governments.
I don’t know what led the United States to sue this German bank, but now that they have found one of those responsible for the crisis, they shouldn’t stop there. They should keep looking for the rest, and there must be a great many of them.
Still, this news makes me as glad as the downfall of Bin Laden: one was a killer of people and the other a financial hitman.
We should send a clear message: in this life, in this world, if you commit abuses with serious consequences, you should pay for them, not be protected or immune from the law.
Further reading
- Inside Job: audiences leave the cinema as if they had seen a horror film
- Would we be able to find those responsible for the crisis in Spain?
Featured image: © Raimond Spekking / CC BY-SA 4.0 (via Wikimedia Commons), CC BY-SA 4.0, via Wikimedia Commons.
