Andrew Newton 
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The International Monetary Fund is not known for random assaults on the financial establishment.
This makes the results of a new IMF study - A Fistfull of Dollars: Lobbying and the Financial Crisis - all the more compelling. Large US banks that spend heavily on lobbying are more likely to engage in high-risk lending, and their shares perform less well. The UK's Guardian newspaper notes that finance sector lobbying outstripped all other sectors.
It is 8 days until the Financial Crisis Inquiry Commission begin to take testimony from top bankers. Their lobbying activities should provide one of the core, and still current, seams of questioning.
In his new book "The Looting of America", Les Leopold details the way Wall Street sold mortgage backed securities to US school trust funds.
For those convinced that the people and communities to whom these instruments were sold did so as informed or else reckless market participants, read this piece.
The only people in a position to assess the real risk (and therefore the proper price) of these instruments were the bankers.
The Center for Public Integrity has released a report on the $370 million spent on campaign donations and Washington lobbying by subprime lenders.
Most of the largest originators of subprime loans were owned or financed by (now) household names including Citigroup, Goldman Sachs, Wells Fargo, JPMorgan and Bank of America - yes, the same banks who have received the lion's share of the TARP bailout funds.
It is time to lock down rampant, destructive flows of money into politics.
The new constraint is part of a package of new rules being proposed in a discussion paper to be released by the FSA on Wednesday. The rules are specifically designed to rein in the risky lending practices that helped precipitate the global financial crisis.
According to The Guardian:
"Lenders, which during the boom offered 'extreme loans' of five or six times borrowers' salaries or more than 100 per cent of a property's value, could now be forced to impose strict limits on how much debt they allow homebuyers to take on."
HSBC bought the subprime lender Household International in 2003. At the time Household was subject to litigation in 50 US states over allegations of predatory lending - making loans available to people who did not understand their commitment - while HSBC had and still maintains a broadly positive reputation for prudence and responsibility.
Analysts thought that the deal would be problematic as a result of this action, but seemed reassured when the 50 states reached a $484 million settlement with Household on 16 December 2002.
While I am sure lax lending was present elsewhere in the group, the Household acquisition took HSBC full into the front line of the problems that have subsequently rocked the global economy.
One day it would be interesting to get an insider view on why such a reputable group threw in their lot with a business as flawed as Household.
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