Commentary: Let’s get going on the real story of the financial crisis

From the editor:

RepoWatch’s main purpose is to help professional and citizen journalists start covering the U.S. repurchase market, by bringing together many repo resources in one place and making it easier for beginners to get started.

To that end, I have written the following piece, now posted online at, the web site for the Society of American Business Editors and Writers:

Let’s get going on the real story of the financial crisis:
Securitized banking

At the SABEW annual conference in Dallas April 7-9, Don Barlett and Jim Steele, America’s most famous investigative reporting duo, gave business reporters and editors an important piece of advice.

Don’t let businesses and politicians frame the story for you, they cautioned.

Sadly, I’m afraid that is what happened to the financial crisis of 2007-2008. We let big banks and regulators frame the story.

That’s how the crisis became a story about mortgages.

It should never have been a story about mortgages.

Instead, it should have been a story about securitized banking, where financial institutions use repurchase agreements, or repos, to finance much of the business of securitizing loans and holding securities.

Securitized banking was the witches’ brew that erupted in 2007 and 2008, when spooked repo lenders fled the market.

Sure, mortgages were a huge story. But they weren’t the main bar of the financial crisis story.  They were an important sidebar.

This misdirection matters, because it denies Americans a chance to consider what I believe to be the most important — and most ignored — issue of the financial crisis: Does securitized banking need safeguards like the safety net that protects traditional banking? If not, how should it be reformed? Or should it be forbidden?

In the 1930s, after decades of bank runs, and against the wishes of key bankers and the Roosevelt Administration, Americans finally forced Congress to create FDIC insurance for commercial banks, paid for by the banks. Ever since, Americans have banked with confidence that their deposits were safe.

Hopefully we can deal as effectively with securitized banking, without having to endure decades of repo runs first. But I don’t know how we can fix it if we never talk about it.

It’s not too late.

CJR’s Dean Starkman blogged recently about ProPublica’s Pulitzer for its fine series on the financial crisis:

“I wonder if the Pulitzer jurors and board feel as I do, that we’re still in about the third inning of this profound and historic event and its aftermath. The virtuosity of (Jesse) Eisinger and (Jake) Bernstein’s work aside… perhaps the best thing about it was that they decided to keep after the story after others had foolishly moved on.”

I urge you to take a new look at the financial crisis through the lens of securitized banking. You can spin the story forward by looking at how the repurchase market is, or is not, being reformed and whether the new Office of Financial Research is collecting the needed data.

I have created to help you get up to speed on this angle.

Let’s get going on this.

-Mary  Fricker

Mary Fricker is an independent journalist who has retired after 20 years as a business reporter for The Santa Rosa (Calif.) Press Democrat. A winner of IRE, Loeb, Polk and Associated Press awards, last year she received the McGill Medal for Journalistic Courage for her work with the Chauncey Bailey Project in Oakland, Calif. ( She can be reached at





One response to “Commentary: Let’s get going on the real story of the financial crisis

  1. Hey maryfricker,

    I must say you have a wonderful website you did a really great job. I have just bookmarked it for future reading. Keep up the great job. I will be back again. 🙂 🙂

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