The recent Washington Post editorial by Mr. Charles Lane entitled "Banks not necessarily to blame for recession" is, in my opinion, an interesting piece of fiction. Mr. Lane refers to a misuse or "hypertechnical" extension of a five year statute of limitations to ten years under an obscure 1989 law making banks liable for fraud affecting any federally insured financial institution. It is difficult to determine how the JP Morgan Chase & Co. agreement to a $13 billion settlement and this statute of limitations extension has anything to do with whether or not the banks are responsible for the recession. The real answer to the question of "blame" for the recession boils down the proper use of basic lending principles.
Continue reading Who can we blame for recession?.