The shareholders are responsible for the management of the company who are in turn responsible for their employees. By wiping out the shareholders in these companies hopefully other shareholders in other financial companies will demand more oversight. In the end people respond to incentives and the individual employees that sold the fraudulent loans were implicitly or explicitly incentivized to do so by management, who were in turn rewarded for this by shareholders. Going after the specific employees that sold the loans is of course morally satisfying, but if we want this to not happen again we need to make shareholders and executives keen to avoid a repeat. Looking at how popular Klarna, gambling companies and now private credit has been with investors, it doesn't seem to have worked, unfortunately.

But, yes, it is a travesty that more of the subprime loan salesmen weren't prosecuted. It has a lot of value for a society to actually convict people that have done actual wrong. We all want to live in a just world and seeing that people who have done wrong get what they deserve is part of that. Looking at the US from the outside I think a lot of the polarization we've seen in the US over the past 15 years could have been avoided if more prosecutions had happened in 2008-2012.

IMO this is also why big companies being allowed to do settlements without admissions of wrongdoing is so bad. They fail to fulfill the moral purpose of law enforcement. Ironically Goldman Sachs _did_ admit wrongdoing in their settlement with the SEC over their Abacus CDFs...

The categorization the Fed uses for NBFI is broader than private credit. E.g. if a hedge fund gives a loan to a private company, that's not private credit because hedge funds seem to have their own category. And lending backed by securities is also in a different category, it seems.

So I guess the Fed expects these other kinds of lending to be safer than private credit?

Hundreds of financial institutions with greater or lesser responsibility for the crash in 2008 went under in those years[0]. The shareholders in almost all of these companies lost all of their money and the responsible employees lost their jobs. This includes some of the most guilty companies, like Washington Mutual, Countrywide Financial, IndyMac, Lehman Brothers, Merrill Lynch (through First Franklin Financial), Bear Stearns. But all these companies are completely forgotten now.

Instead everyone hates on Goldman Sachs. Sure, Goldman Sachs deserves hate, but of the big banks they were the _least_ guilty of the crash in 2008. Not saying they were saints, but in 2008 they were the least bad.

0: This list only covers banks, not non-banks like Countrywide Financial: https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_U...

I'm not sure I agree with your list.

Aircraft:

Airbus seems to be leagues ahead of Boeing, not just in the civilian market, but also in military aircraft. Just look at their competing modern military tankers: the Boieng KC-46 is a worse plane than the Airbus A330 MRTT, but had huge cost overruns and delays.

EU is also at the cutting edge in helicopters, in fact 3 of the 5 new classes of manned helicopters introduced by the US military in the 21st century are from the EU: the MH-139, UH-72 and TH-73.

Submarines:

The Swedish Gotland and Blekinge class, and the German type 212 are both ahead of anything the US has. Wrt. bigger submarines, I don't think there's enough public information to argue that the French Triomphant-class is worse than the US Ohio-class

Advanced missiles:

The IRIS family, MBDA MICA and MBDA Meteor are cutting edge, European air-to-air missiles. MBDA also has a set of modern long, medium and short range anti-shipping missiles: the Otomat, Exocet and Marte. And that's on top of the evolutions of the Saab RBS 15 and Kongsberg/Diehl/Nammo 3SM. And the Swedish Saab NLAW anti-tank missile has been very successful with Ukraine in the past four years.

Cutting edge medical equipment:

Medical equipment is a huge field and very diverse and specialized, so it's easy to miss the areas where the EU is cutting edge. Just some examples I know of:

Siemens and Phillips are still top dogs in MRI machines. Three of the top five hearing aid companies are Danish: Demant, GN Store Nord and WS Audiology[0]. German Karl Storz is _the_ world leader in urology equipment. Danish Ambu is _the_ leader in single use endoscopes. Finnish Planmeca is a leader in dental equipment and their subsidiary Planmed one of the top 3 mammography companies in the world. Danish 3Shape and German exocad are more-or-less the only choices in dental implant CAD/CAM. Just to give a few examples

High voltage grid equipment:

Europe has been constructing a lot wind farms, many of them off-shore, and a decent amount of high-voltage, international electricity connections in recent decades. Most of that has been with European-made equipment. Some of the companies manufacturing that in Europe: Danish NKT, German Siemens and Swiss/Swedish Hitachi Energy (formerly ABB Power Grids) are three I know on top of my head. And then there are companies like Alstom that makes all the infrastructure around electric rail.

Ships:

European navies use warships built in Europe and I've seen nothing to suggest they are worse ships than Chinese warships. So the technology and shipyards are there to produce cutting-edge merchant ships, it's just not cost-effective.

Electric motors:

I've seen nothing to suggest Chinese motors have surpassed anything Swiss/Swedish ABB or Simens motors can do. And there are a ton of smaller, specialized motor manufacturers, e.g. Danish Grundfos that makes specialized motors for pumps.

Steel, aluminum:

The EU is self-sufficient in steel. A quick list of major companies producing steel in Europe: Spanish Acerinox, Luxembourgish ArcelorMittal, Austrian Voestalpine, German ThyssenKrupp, Italian Riva Group, Finnish Outokumpo, German Salzgitter, Swedish SSAB and French Vallourec.

Wrt. aluminum, the EU isn't quite self-sufficient. But ~75% of the imports are from Norway, Turkey, Iceland and Switzerland. So it depends on your definition of Europe.

Oil:

Oil is a commodity. You don't really gain anything technologically from producing it yourself, on the contrary it's seen as almost a curse, re:Dutch disease and so.

Cutting edge pharma:

If there's any category of company that's permanent fixture of EU stock indexes, it's pharma. To give just one example, Biontech, developer one of the two main Covid vaccines, is German.

Wind turbines:

In wind turbines Danish Vestas is number one and Spanish/German Siemens Gamesa is number two. The Chinese are catching up fast, but they're still behind.

Trains:

Spanish Talgo, French Alstom and German Siemens are all world-class EU train companies. Stadler is world-class, but Swiss, so it could also count. Then there's Hitachi Rail Italy (formerly AnsaldoBreda). As a Dane, I'm unwilling to call anything related to AnsaldoBreda "world-class", but the driverless trains they have supplied to the Copenhagen Metro meet the mark.

So I'd argue that there's at least 10 more categories where the EU is at least tied.

0: the last two are Swiss Sonova and American Starkey.

Well, the term "natural gas" is ~200 years old and was invented to distinguish it from manufactured coal gas. But other than that, you're right. It's getting tiring having to explain to people why biogas isn't "natural gas".