The New Yorker's James Surowiecki sat down with House Financial Services Committee chairman Barney Frank and talked financial regulation, health care and the economy (hat tip to The Big Picture).
The chat took place August 24th in Frank's office in Newtown, Massachusetts. Discussing the housing bubble and the government's efforts to stem the mortgage crisis, Frank defended some portions of the banking industry. The comment was a bit odd, considering the massive bets banks of all sizes made on the housing industry.
Here's Frank:
"If you talk to bankers, particularly smaller bankers...they're very angry when people blame the banks for the subprime crisis because, on the whole, it wasn't the regulated financial institutions that did this. What happens was that a whole set of institutions grew up that could make mortgages that were not part of the banking system...Most of the loans that went bad were made by the non-banks. It wasn't deregulation, but non-regulation."
Lending his support to the Obama Administration's proposed Consumer Financial Product Agency, Frank took a jab at Fed Chairman Ben Bernanke: "In every case where the Federal Reserve under Bernanke has done any consumer protection, it was provoked by Congress acting."
WATCH: