Here's how it goes.
- Banks create derivatives and sell them to investors. These derivatives never hold any actual value, nonetheless they are listed on balance sheets as assets. Banks show progressive growth over time due to increasing asset holdings.
- The derivatives are eventually found to be practically worthless, and become suddenly devalued, as does the bank's value itself.
- Real money is funneled to the banks to "save the industry," thus rewarding the system and players who invented the fake assets in the first place.
What a racket. It's like the polar opposite of accountability.