most recent banking scandal i'm joined by william black in kansas city he's an associate professor of economics and law at the university of missouri kansas city and author of the best way to rob a bank is to own one and in london we go to richard wellings he is deputy editorial director at the institute of economic affairs all right gentlemen crosstalk rules in effect that means you can jump in anytime you want ok william and i to go to you first here it looks like the global banking system is one big cartel illegal operations and controlling the global economy would you agree or disagree with that statement. now it's not one big cartel but there are a series of large cartels and this scandal makes clear that the city of london is controlled by an enormous cartel and it's made a terrible mistake from its own standpoint it is now violated the antitrust laws and while it's been getting away with a slap on the wrist for all of its misdeeds from the banking regulators who do this like touch regulation in the united states there is enormous potential liability under the antitrust laws and this is going to be at the game changer that is

your questions, and lp y finthe rp medire splemt pl >>> wan to bring in bill black at university of missouri, kansas citythe best way to r a bank is t owe e. sothinyou end lotf time thiing abo andlso as aregutor,s cminogist loing into authat tind of conditions are that do produce either ethical corner cutting or outright illegal behavior. >>re. so,ealk abocrnuogic viroents envinmen tha pduce epemicof fud a w can giveou impical edencon the debat you just been having. so, for in the savings and loan crisis, for example, detailed inveigatns, e rert of the natnal cmissn fnd at a a typal lge faure, frdas varily esen we kw that if you use a compensation system, you can prode endic frd. sover % of t araiss sign aetitn bging the itedtatetoakectio agnst appraisal fraud. we found in invesgations that wamu, washington mutual, had blk lif appiser aou go onhe bla lt if you fuseto inathe prail. no thibout that ere no rson why a honest banker would ever inflate an appraisal. and that happenedoutilynd evence sho thave 75% of apprsersere bjecd t erci actns aays inflate the appraisal and that this came from the lenders. a

. >>> want to bring in bill black at university of missouri, kansas city. e best way to rob a bank is to owe one. something you spend a lot of time thinking about and also as a regulator, as a criminologist looking into about what the kind of conditions are that do produce either ethical corner cutting or outright illegal behavior. >> sure. so, we talk about crimnuogenic environments. environments that produce epidemics of fraud and we can give you imperical evidence on the debate you just been having. so, for in the savings and loan crisis, for example, detailed investigations, the report of the national commission found that at a typical large failure, fraud was invariably present. we know that if you use a compensation system, you can produce endemic fraud. so, over 10% of the appraisers signed a petition begging the united states to take action against appraisal fraud. we found in investigations that wamu, washington mutual, had a black list of appraisers and you got on the black list if you refused to inflate the appraisal. now, think about that. there