If Bernanke is correct, then nearly all banks would be in dire straits, fact is over 95% of banks are NOT on the FDIC watch list as has been reported here since the fall of 2008.
Approximately 90% of ALL residential mortgage borrowers (Prime, sub Prime, Alt A, etc.) are making payments.
CONSCIOUS decisions made by professional investors at certain large Wall St brokers / banks; not confined to Bear Stearns and Lehman Brothers.
CONSCIOUS decisions to make more profits;
POTENTIAL SELF DEALING BY CERTAIN BANKS' SOURCE OF AND USE OF OFF BALANCE SHEET LEVERAGE:
Subject to confirmation upon additional information - certain banks operations may have been partly sourced by diversion (and perhaps improper use of, the subject of a pending class action matter) of customers' short term "sweep" funds. Subject to a forensic accounting audit, it may or may not be the case that certain of these monies found their way onto the balance sheets of the banks free to be lent NOT to the banks traditional commercial loan customers rather, it's believed, to the banks' own off balance sheet affiliates to capitalize / enable the issuance by same of commercial paper to raise funds to finance the purchase of longer dated Mortgage backed and related securities.
And in the process, NOT do what banks' raison d'etre, charters generally call for - "FOR CUSTOMERS" - BUT CERTAIN BANKS / BROKERAGE FIRMS did or may have done for themselves; raising a fundamental question of a bank's potential conflicts of interest that arise in carrying out its duty to shareholders or customers - which gets or should get priority?
To this day, certain banks, despite hundreds of billions in collective taxpayer support, have not disclosed the full nature and extent of the use of these customers' funds nor the purpose of the banks' potential instances of self dealing.