February 7, 2022
ANY mechanisms artificially inflating assets to meet margin requirements or that puts undue risk on an entity, or the market must have complete transparency if allowed and should likely be prohibited. Further, assets must be accurately examined to reflect true value. This is to include security-based swamps, commercial mortgage-backed securities, and other securities programs that are considered fragile. Risk assessment of the assets must be done at regular intervals and more frequently if the market climate requires it. Further, examiners/agencies must be held accountable for failure to assess value adequately and accurately. Institutions, individuals, or examiners/agencies that attempt to artificially inflate assets should be tried for criminal charges (e.g., wire fraud, embezzlement, forgery, etc.) in addition to 1.5x of the resulting crime in financial penalties to discourage illegal behaviors. Financial penalties are considered the cost of doing business at banking and Wall Street institutions because the profits far outweigh the penalty of breaking the rules or the law.