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Notes to Chapter 16 609

25. Based on chart in Federal Reserve Bank of New York, Developing Metrics for the Four Largest Secu-
rities Firms, August 2008, p. 5.
26. Ibid.
27. Tobias Adrian, Christopher Burke, and James McAndrews, “The Federal Reserve’s Primary Dealer
Credit Facility,” Federal Reserve Bank of New York, Current Issues in Economics and Finance 15, no. 4
(August 2009): 2.
28. Erik Sirri, interview by FCIC, April 9, 2010, p. 3.
29. Fed Chair Ben Bernanke, “Lessons from the Failure of Lehman Brothers,” testimony before the
House Financial Services Committee, 111th Cong., 2nd sess., April 20, 2010, p. 1.
30. Valukas, 1:8 n. 30: Examiner’s Interview of Timothy F. Geithner, Nov. 24, 2009, p. 4.
31. Valukas, 4:1486.
32. Sirri, interview.
33. William Brodows and Til Schuermann, Federal Reserve Bank of New York, “Primary Dealer Mon-
itoring: Initial Assessment of CSEs,” May 12, 2008, slides 9–10, 15–16.
34. Federal Reserve Bank of New York, “Primary Dealer Monitoring: Liquidity Stress Analysis,” June
25, 2008, p. 3.
35. Ibid., p. 5.
36. Valukas, 4:1489.
37. Ibid., 4:1496, 1497.
38. Christopher Cox, statement before the House Financial Services Committee, 111th Cong., 2nd
sess., April 20, 2010, p. 5.
39. Patrick Parkinson, email to Steven Shafran, August 8, 2008.
40. Counterparty Risk Management Policy Group, “Toward Greater Financial Stability: A Private Sec-
tor Perspective, The Report of the CRMPG II,” July 27, 2005.
41. Federal Reserve Bank of New York, “Statement Regarding Meeting on Credit Derivatives,” Sep-
tember 15, 2005; Federal Reserve Bank of New York, “New York Fed Welcomes New Industry Commit-
ments on Credit Derivatives,” March 13, 2006; Federal Reserve Bank of New York, “Third Industry
Meeting Hosted by the Federal Reserve Bank of New York,” September 27, 2006.
42. See Comptroller of the Currency, “OCC’s Quarterly Report on Bank Trading and Derivatives Ac-
tivities, First Quarter 2009,” Table 1; the figures in the text are reached by subtracting exchange traded fu-
tures and options from total derivatives.
43. Chris Mewbourne, interview by FCIC, July 28, 2010.
44. This figure compares with a low in 2005, at the height of the mortgage boom, of $7 billion in prob-
lem assets. “Problem” institutions are those with financial, operational, or managerial weaknesses that
threaten their continued financial viability; they are rated either a 4 or 5 under the Uniform Financial In-
stitutions Rating System. FDIC reporting for insured institutions—i.e., the regulated banking and thrift
industry overall. See Quarterly Banking Profile: Fourth Quarter 2007= FDIC Quarterly 2, no. 1 (Decem-
ber 31, 2007): 1, 4; Quarterly Banking Profile: First Quarter 2008 = FDIC Quarterly 2, no. 2 (March 31,
2008): 2, 4; Quarterly Banking Profile: Second Quarter 2008 = FDIC Quarterly 2, no. 3 (June 30, 2008): 1.
45. By 2009, the problem list would swell to 702 banks, with assets of $403 billion. Quarterly Banking
Profile: Fourth Quarter 2009 = FDIC Quarterly 4, no. 1 (December 31, 2009): 4.
46. Quarterly Banking Profile: First Quarter 2008, p. 4.
47. Roger Cole, interview by FCIC, August 2, 2010.
48. FCIC interview with Michael Solomon and Fred Phillips-Patrick, September 20, 2010.
49. Federal Reserve Bank of New York, letter to Charles Prince, April 9, 2007.
50. Federal Reserve Bank of New York, Federal Reserve Board, Office of the Comptroller of the Cur-
rency, Securities and Exchange Commission, U.K. Financial Services Authority, and Japan Financial
Services Authority, “Notes on Senior Supervisors’ Meetings with Firms,” November 19, 2007, p. 3.
51. Federal Reserve Board, “FRB New York 2009 Operations Review: Close Out Report,” p. 3.
52. Timothy Geithner, testimony before the FCIC, Hearing on the Shadow Banking System, day 2,
session 1: Perspective on the Shadow Banking System, May 6, 2010, transcript, p. 210.
53. Steve Manzari and Dianne Dobbeck, interview by FCIC, April 26, 2010.
54. Federal Reserve Board, “Wachovia Case Study,” November 12 and 13, p. 20;
55. Angus McBryde, interview by FCIC, July 30, 2007.