This is after a series of post-crisis banking scandals revealing the fragility of the banking system and after JPMorgan Chase was the only bank to receive an SEC fine combined with an admission of wrongdoing for its well-publicized London Whale incident. Officers of JPMorgan Chase have not been held accountable. Moreover, banks harbor massive balance sheet risk against which they hold insufficient capital.

Timothy Geithner, former president of the Federal Reserve Bank of New York, a bank regulator during the run up to the financial crises, and later the Secretary of the Treasury, claims that no one knew housing prices could fall. He sounded like a very silly man when he said over and over on his recent book tour that sophisticated financiers didn't understand the dynamics of a housing bubble. I never once heard him mention well-documented fraud, despite massive fraud uncovered by Congressional investigations.

With men of Geithner's ilk having their back and the potential of huge financial rewards, many rational men of weak character assessed the risks and rewards of fraud and chose to enrich themselves, since the chances of being held accountable were slim. It turns out they were correct.

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