THE MORALS OF THE MARKETPLACE

I have read numerous times that capitalism does rely on trust but that doesn't seem to be much of an issue for Wall Street MOTU.

Big Banks Mask Risk Levels
Quarter-End Loan Figures Sit 42% Below Peak, Then Rise as New Period Progresses; SEC Review
APRIL 8, 2010

By KATE KELLY, TOM MCGINTY and DAN FITZPATRICK
Wall Street Journal

Major banks have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public, according to data from the Federal Reserve Bank of New York.

A group of 18 banks—which includes Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.—understated the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods, the data show. The banks, which publicly release debt data each quarter, then boosted the debt levels in the middle of successive quarters.

The NY Times notes that "there is nothing illegal about the practice, though it means that much of the time investors can have little idea of the risks the any bank is really taking."