I noted last month that the record of auditors' ability to assess the worth of banks' loan portfolios is singularly uninspiring. In the US, the Securities and Exchange Commission (SEC) is actively pursuing auditors who issued clean opinions after accepting management's assurances of worth, followed by massive bailouts.

Yet any meaningful audit is impossible when supposed collateral is a bundle of domestic mortgages, resold in the mortgage-backed security market so many times that it's impossible to legally determine who actually owns it when foreclosure becomes inescapable.