The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
George SorosWhen money is free, the rational lender will keep on lending until there is no one else to lend to.
George SorosGlobalization has rendered the world increasingly interdependent, but international politics is still based on the sovereignty of states.
George SorosI passionately disagreed with Treasury Secretary Hank Paulson's plan to bail out the banks by using a public fund called the Troubled Asset Relief Program (TARP) to help banks take toxic assets off their balance sheets. I argued that it would be much better to put the money where the hole was and replenish the equity of the banks themselves.
George SorosAs an anonymous participant in financial markets, I never had to weigh the social consequences of my actions ... I felt justified in ignoring them on the grounds that I was playing by the rules.
George Soros