Why the U.S. banking system could be on the verge of another crisis

UC Berkeley School of Law Professor Frank Partnoy outlines how banks are making mistakes similar to those leading up to the 2008 financial crisis -- only this time with a new type of security that could break bank balance sheets beyond repair.

For access to live and exclusive video from CNBC subscribe to CNBC PRO:


Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

Connect with CNBC News Online

#CNBC
#CNBC TV

[jimmyjones]

what I don't understand is why the folks with ALL THE MONEY constantly need help?

[teebone]

they keep destroying the system and the government keeps bailing them out

[bizjets]

The only constant here is the the tax payer always pays for the sins of the rich.

[ray]

This is important but having the fed throwing money away on corporate bonds and indirectly (possibly) create zombie companies is more damaging than this issue.

[InvestorCenter]

“You never know who is swimming naked until the tide goes out”.
-Warren Buffett

[zakikhan]

Everythings been in crisis. Cant live off borrowed money to only pay it back by borrowing more money

[libertysprings]

What the banks did this time also is to loan money to buy rental properties to small inexperienced folk where the loan was granted based on rental income. Some of these young people borrowed money to buy 20 homes! Oh wait, they'll say sorry, the banks and borrowers "forgot" about recessions when those renters wont be able to pay and therefore the little 20-home-middleman-guy wont be able to pay the mortgage and end up in bankruptcy.. Who did they sell the MBS for these to this time? Here we go again. But don't worry, the fed will buy all the MBS again like last time to bail out the investors and banks. The cycle repeats over and over since investors and banks know they'll get a bailout in each recession. The fed should STOP bailing out the banks by buying MBS and then finally the cycle can stop and let home prices collapse to become affordable again for young buyers that just need ONE home, to live in!!!

[denisbaranov]

We need Ryan Gosling to help us explain what CLO means

[Rick-orkq]

Anybody else getting the feeling that the system is a train wreck?

[albanduro]

Bitcoin is the future, investing in it now will be the wisest thing to do especially with the current rise in bitcoin

[stockmarketclasses]

Nice video, I just discovered that bitcoin trading is now one of the fastest way to make money online…it’s really a life changer

[ryandarko]

I’m from nyc we are financially worse than San Francisco the cost of living is beyond horrible. Please let the system crash in tired of workin for no reason at all whatsoever

[meh]

Media: we've recovered!
Also Media: all is going to sh**

[raybod]

The Fed is doing what they want, legal or not.

[JankAt]

It's a ticking time bomb, but it's also not. Great reporting CNBC.

[hi-iflj]

Just ask the US government about missing trillions

[a_blaser]

CNBC: “We’re not here to terrify people.” Uses headline: “on the verge of another crisis”

[YTM]

The next crash, mixing in decent loans with garbage and trying to re-value it as diversified, when in essence its all dogshit.. #TheBigShort #crash

[bobbiblake]

A message for the producers of CNBC: Thank you for this excellent educational video on the impending banking/monetary crisis. It's about time the mainstream media started talking about this, as the 'alt' media has been warning us for years. Please consider having any of the following people as guests: Peter Schiff, David Stockman, Michael Pento, John Rubino, Rob Kirby, Alasdair Macleod, Danielle DiMartino Booth, Catherine Austin Fitts, Harry Dent, Jim Rickards.

[Summer-nmsi]

Why are you worried? The Fed will buy all those CLO and drive stock market up. So this news imply to buy more banks shares because the Fed will buy anything these days.