In a very interesting article, David Dayen looks at the incentive bankers had to hide behind the opacity of the securities they were selling and misrepresent the quality of the mortgages underlying the non-government guaranteed mortgage-backed securities.

How much money are we talking about overall? Let’s just look at 2005 and 2006, the two years at issue in the FHFA case, and the biggest years for mortgage-backed securitizations. Banks sold over $1 trillion in mortgage-backed securities each of those years. … And if appraisals were inflated by 11 percent on loans in securitization pools in 2005 and 2006, that means that the banks issuing the securities stole over $100 billion a year from investors who purchased the puffed-up mortgage bonds.

Even for bankers, $100 billion a year is real money.

Of course, had the Transparency Label Initiative™ existed in 2005 and 2006, these securities would not have received a label. As a result, they would have been recognized by investors as simply blindly betting on the contents of a brown paper bag based on the representations of someone who stood to gain if the investors wanted to place a bet. As a result, the market for these securities would have been dramatically smaller.