The authors of the reports also pointed out that the Big Four audit companies (EY, Deloitte, KPMG and PWC) engaged in designing the most important bailout packages were responsible for losses.
"In cases where the bailout consultants gave poor or inaccurate advice on the allocation of state aid there have been few consequences, even when state losses actually increased as a result. Bailout consultants have often been rewarded with new contracts despite their repeated failures," the report read.
"The firms responsible for assuring investors and regulators that EU banks were stable, the Big Four audit firms, maintain their market dominance despite grave failures in their assessment of the EU banking sector’s lending risks," it added.
"The Big Four audit companies consulted European banks not only before the crisis, but also after the crisis. They also consulted governments," Friedrich said in an interview with Sputnik Germany.
According to the expert, those responsible companies finally made profits on the crisis.
"They never lost profits, either before the crisis or after it. They let down taxpayers who have been paying for that since then. In fact, this is an unprecedented scandal because the audit firms did not have to compensate losses. They were not brought to responsibility for their failures and poor management," Friedrich pointed out.
According to Friedrich, European political elites are driven by their own interests in the matter.
"Of course, political elites as well as financial elites are interested that European banks do not have problems because they are dependent on banks. All governments and companies are financed through banks. So, they want banks to survive, even at the expense of taxpayers," the economist said.
Friedrich warned that the financial crisis is not over yet and all those bailout programs and packages only delay it.
"This ticking time bomb will explode. We can see that currently many Italian and Spanish banks are in a difficult situation. De facto they are bankrupt. Deutsche Bank also has problems. A new collapse is likely in the banking sector, and it will be worse than the 2008 financial crisis. If this happens the European Central Bank and European governments will not be able to handle it," the expert concluded.
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