How the Banks Won (2010)

The film How the Banks Won delves into the systemic corruption within the United States financial services industry, particularly during the late-2000s financial crisis. Directed by Charles Ferguson, the documentary meticulously examines the events that led to the crisis and sheds light on the consequences of this corruption.

In five parts, the film explores the policy changes and banking practices that played a pivotal role in creating the financial meltdown. It begins by examining Iceland’s shift toward deregulation in 2000, which included privatizing its banks. When Lehman Brothers collapsed and AIG faced its own crisis, the repercussions reverberated globally, plunging the world into a severe recession.

The documentary reveals how the American financial industry transitioned from regulation to a prolonged period of deregulation. The savings and loan crisis of the late 1980s cost taxpayers billions, and the consolidation of the financial sector into a few giant firms further exacerbated instability. The burst of the Internet Stock Bubble in 2000 resulted in massive investor losses due to investment banks promoting doomed Internet companies.

Derivatives gained popularity in the industry during the 1990s, but efforts to regulate them were thwarted by the Commodity Futures Modernization Act of 2000. Meanwhile, investment banks bundled mortgages and other debts into collateralized debt obligations (CDOs), which they sold to investors. The film also highlights conflicts of interest in academic research and their impact on disclosure standards.

How the Banks Won meticulously dissects the intricate web of financial practices, revealing how the industry’s actions ultimately led to the devastating crisis. Critics praised the film’s pacing, thorough research, and ability to explain complex material. It was screened at the 2010 Cannes Film Festival and won the Academy Award for Best Documentary Feature in 2011.