Some of the same Wall Street big banks whose financially reckless banking practices helped create the “Great Recession of 2008-2009” also apparently played a role in creating the late 1990s dot-com/telecom industry bust. For example, according to the 2004 book by Roger Lowenstein, Origins of the Crash:
“Gary Winnick, the architect of Global Crossing, a transoceanic fiber developer, was the most brazen of the bandwidth barons and, indeed, operated on a grand scale reminiscent of the original robber barons…
“Working from an opulent Beverly Hills headquarters, whose inner sanctum was modestly designed to resemble the Oval Office, Winnick borrowed billions…
“…The telecoms had a prodigious appetite for loans; moreover, the boom coincided with the repeal of Glass-Steagall, which had separated underwriting from banking. Banks such as Chase Manhattan (soon to be J.P.Morgan Chase) were now thirsting to move into underwriting. With telecoms equally thirsting for cash, banks used loans as bait to get the inside track on underwriting assignments, the precise abuse that Glass-Steagall had been intended to prevent. As Julie Creswell later revealed in Fortune, Chase was a notorious offender. It not only cut its fees to worm its way into banking deals; it courted Winnick…by introducing him to David Rockefeller, Chase’s former chairman…Rockefeller escorted Winnick…on a private tour of the Museum of Modern Art. By such means, Chase became Global’s banker and, indeed, the telecom industry’s commercial banker of choice. There is no evidence that the bank of David Rockefeller was overly concerned with whether demand for bandwidth was truly insatiable or—in the event it was not—with how its loans would be repaid…In 1999, Global showed earnings of $10 million—before, that is, Global’s interest expense of $92 million. No banker—no genuine banker—would lend on the basis of such numbers, suggesting mightily that Chase and the rest were scrambling after fees—were, that is, risking their shareholders’ capital in order to book short-term profits…”