Jesse Eisinger Discusses Merrill Lynch’s Internal “Subsidy”

A podcast from ProPublica.

This week, Jesse Eisinger sits down with us to discuss Merrill Lynch and how its decision to internally boost demand for their money-losing securities nearly cost the banking giant everything. Eisinger explains what Merrill staffers meant by “a million for a billion,” which executives knew about the plan and whether it was legal. Oddly enough, there has been a noticeable lack of prosecutions considering all that happened, but Eisinger succinctly points out that keeping the fragile financial system intact was at the heart of the issue, which made instilling trust the name of the game.

“The regulators and the government wanted to shore up confidence in the banking sector, and if you had a steady parade of Wall Street executives going to prison for fraud, that would erode confidence,” Eisinger said. …