Banks are supposed to be adequately capitalized (well…who knew). One job of the regulators is to review these capital ratios. It has turned out that the Office of Thrift Supervision (a government regulator) allowed IndyMac Bank to back date capital infusions which enabled the bank to show itself in a better position than we now know it was.

Next up – a comment on the bond rating agencies.

Source: “Office let Indy Mac backdate capital,” Financial Times. www.ft.com