The 2010 documentary Inside Job, explores the events leading up to the 2008 Financial Crisis, as well as the post-crisis economy. Over the last two decades, major investment banks teamed up with rating agencies and securitized insurance companies and exposed investors to an unprecedented amount of high-risky investments and loans, while betting against the very same investments which they promoted as high-quality, maximizing their own profit in the process.

The biggest issue behind these events is moral hazard. Moral hazards a situation in which the party responsible for decision making is not responsible for the consequences, and the decision maker is likely to take more risks and maximize his/her own interest. For instance, banks withheld potential risk factors from investor when promoting low-value CDO’s, because the investment capital belongs to the investors, and not the bank. Therefore, the consequences fall on the shoulder of the investors. Rating agencies manipulated reports to help banks achieve their goal. When the financial industry finally came crashing down, the United States government had to issue a 7 million dollar bailout for the financial industry, taken from the Federal Reserve Fund – taxpayers’ money. And the men and women responsible for plunging the world into this crisis walked way with their fortunes intact. It is essentially an ethical issue in the business practices of these firms that led to the economic recession.

With the recent emergence of the OccupWallSt protests, awareness is being raised amongst the general public about the unethical practices done by the financial industry. But most of us are still in the dark about what really happened, because it is still a “Wall Street government”.

Inside Job PressKit:

http://www.sonyclassics.com/insidejob/_pdf/insidejob_presskit.pdf