Bill Black, who wrote our November/December cover story— (Mis)Understanding a Banking Industry in Transition—is in the news again. An earlier posting (McCain in Bed with Lobbyists; Taxpayers Get Screwed) pointed out that Black was quoted in the New York Times article about McCain’s dealings with lobbyists that created such a fuss. Now Black is a key source for a recent Boston Globe story on McCain’s role in the S&L crisis as one of the Keating Five:
Amid McCain’s new status, old scandals stir
By Michael Kranish
Globe Staff / February 28, 2008
WASHINGTON – As William K. Black watches John McCain move toward the Republican presidential nomination, he thinks of a day 21 years ago that he considers one of the most troubling of his life.
Black, a senior federal savings and loan regulator at the time, attended a meeting at which he felt McCain and four other senators pressured federal regulators to back off from investigating the troubled Lincoln Savings and Loan.
“I remain very upset that what they did caused such damage,” said Black, now a professor at the University of Missouri at Kansas City, recalling how Lincoln’s bankruptcy cost the government $3 billion. Moreover, he said he believes McCain intervened partly because his wife had invested money with Lincoln chairman Charles Keating, a campaign contributor who let the McCains use his home in the Bahamas. Read the rest of the article.
Black’s feature article for D&S puts the current banking crises in the context of the history of banking deregulation and fraud that also led to the S&L crisis. A longer version of the article—giving a more comprehensive recent history of the banking industry in the United States—can be found in our brand new book Real World Banking and Finance, now available through our online bookstore.