May 19, 2011
To whom it may concern:
Although only 2 years have passed since the collapse of the economy, new agencies report that bankers are overleveraging their investments.
Excessive leveraging at certain financial institutions was unquestionably a major cause of the 2008 Wall Street meltdown. According to a McKinsey Global Institute study, gross leverage (assets/equity) at the former Big Five broker-dealer investment banks — Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley — increased by 42 percent between 2002 and 2007. During that same period, government-sponsored mortgage giants Fannie Mae and Freddie Mae also became dangerously overleveraged.
I urge regulators to strictly enforce reasonable leverage ratios.
Thank you for considering my comment,
Matthew Gray