Today's Outrage: Don't the Banks Get It Yet?

As far as lack of oversight, few would question now that tighter regulation of the financial industry is in order. But who is to blame for its breakdown? A culture of deregulation -- pushed by bank lobbyists and endorsed by Republican and Democratic administrations dating back to Ronald Reagan -- weakened the hands of regulators and encouraged the sort of financial chicanery that brought us subprime collateralized mortgage obligations and other credit derivatives dependent on a robust housing market.

These products became financial weapons of mass destruction in the credit crisis.

Bankers employed by big institutions like Citigroup (C Quote), JPMorgan Chase (JPM Quote), Bank of America (BAC Quote) and Wells Fargo (WFC Quote) are smart people. They wouldn't have sat idly by as the government pushed to expand home ownership, deregulate the industry or lowered interest rates without a compelling reason.

Banks loosened loan underwriting standards for one reason: It was profitable. I don't remember too much whining about cheap credit and deregulation when that was still the case.