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Following are selected quotes from documents used by Commissioners in the hearing “Subprime Lending and Securitization and Government-Sponsored Enterprises” on April 8, 2010. 2007 Federal Reserve Bank of New York Minutes of Senior Supervisors Meeting o Angelides quoted in Session 1 @ 00:24:33; Transcript page 21. o Holtz-Eakin quotes in Session 1 @ 02:09:24; Transcript page 102. - - "Poor communication across businesses: decentralized nature of the firm created silos." "Senior Management, business line and risk management did not fully appreciate the market risk of the leverage loan pipeline or of the retained super-senior CDO positions." "Corporate-wide stress testing and scenario analysis was insufficient, and not compensated for by other controls." "The firm did not have an adequate, firm-wide consolidated understanding of its risk factor sensitivities." "The nature, origin, and size of CDO exposure were surprising to many in senior management and the board." 2007 Internal Office of the Comptroller of the Currency Memo o Angelides quoted in Session 2 @ 02:07:00; Transcript page 241-242. "Relativity and the Boiling Frog Theory-- I explained I was concerned that management and committees such as CMAC which are too close to these types of products may become too conditioned and not perceive subtle changes over a long period of time, much like what happened to real estate in the 1980s. I explained that occasionally sending the most extreme deals to David Bushnell and Randy Farmer was a good practice and helped them occasionally dip their fingers in the pot to insure that the water was not getting too hot."