Lloyds TSB stood out thanks to its conservative policies which had largely kept it out of the so-called "toxic securities" dealt in by other banks with riskier business models.

Matthew Lee, founder of watchdog Fair Finance Watch, says that although Wells Fargo was not involved in packaging toxic mortgage-backed securities on the capital markets, it did its fair share of risky lending on the high street, shrewdly passing the loans on to third parties.

Rogers also warns Cohen that their customers will quickly learn of the firm's plans, once they realize that the firm is only selling (unloading) the toxic mortgage-backed securities but will accept none whatever in exchange for their sale.

In the lawsuit brought by the R2 hedge fund, which is scheduled go before a federal jury in Manhattan, the issue is whether Smith Barney and Jefferies worked together to unload toxic securities into the market and whether Jefferies was obligated to disclose the existence of the big-boy letters to the fund.

According to George Soros, "the toxic securities in question are not homogeneous."

First [Paulson's Department of Treasury] says it has to have $700 billion to buy back toxic mortgage-backed securities.

Should the U.S. government create large quantities of money to help it purchase toxic mortgage-backed securities and other poorly-performing assets from banks, there is risk of inflation and dollar devaluation relative to other countries.

Still, Goldman was not alone in cooking up deals with hedge funds, or in creating toxic subprime securities.

To be precise, it was this agency that was accused by former analysts in the US Congress of being forced by their superiors to give toxic securities a positive rating.

In recent years, predatory lending has gone unchecked, and, with little or no oversight, Wall Street banks bundled subprime home loans into complicated and ultimately toxic securities.