BANKING / FINANCE

Few Are Spared: Accountants and even regulators also came in for some rough treatment from Scalzi.

He criticized the industry’s change from generally accepted accounting principles, known as GAAP, to regulatory accounting principles, known as RAP. The change was an effort to bolster S&Ls; in the early 1980s when, in fact, capital was flowing out of thrifts.

“Then we moved to CRAP--creative regulatory accounting principles,” he said. From there, he said, jokingly, the industry used “true CRAP” and finally “ZAP,” or zero accounting principles, which he says, “show profits but don’t tell them how you did it.”

The changes in accounting procedures not only hid the true financial condition of thrifts but also created the illusion that all was well, he said.

“We were all fat, dumb and happy through the 1980s,” Scalzi said, blaming everyone for the thrift debacle that could cost taxpayers more than $500 billion over the next 30 years. “We let it happen. We can’t let it happen again.”