Not all are culpable nor played along. HSBC for example have sod all exposure to US sub prime, UK sub prime, the CDS or CDO market and haven't needed on penny of public bailout.
They were also the canaries in the coal mine when they declared the exposure that they did have to falling US house prices (through one bad acquisition).
Claims that the banks didn't know or understand what they were investing in is just spin with extra smoke and a side order of mirrors. They knew. They just concluded that if enough of them got in deep enough then the government would bail them out.
That worked.
Hank Paulsons plan almost worked too.
That was a close run thing. It will all be explained in a really good book in about 10 years times.
Just like with Enron - these guys were the smartest people in the room. Suggestions that they were ignorant and stupid are just the cleverest trick the devil ever pulled.
WWW