Mini-bond Saga : Are financiers wrong?

3 Days ago, when I was walking on the street, I passed in front of a bank. There were 3 people standing in front of the bank and shouting 'Banks are greedy', 'Be Careful, Devils inside'.

What they did was related to the mini-bond saga (Lehman Brothers related) aroused 5 months ago. Just to refresh your memory, huge proportion of the victims are 50 years old and above. Most of people in this age category did not have enough knowledge of investment product which they bought. They bought the product based on the knowledge they have and from the financiers (of financial institutions).

But now, are financiers the one to be blamed? are the victims? Probably, both of them are to be blamed.

Financiers are obliged to provide necessary information (based on the regulation) to clients. (1)

Clients must sign 'contract' verifying that they understand the product and they will accept any risk involved. (2)

If (1) & (2) occurs, no one is guilty.

But in fact, this (perfect) situation will never happen.
(1) Financiers probably will not provide necessary information. Financiers might only follow the minimum requirement of information distribution. They are driven by commission. In today's market, everyone believes that if the risks are well distributed (such as CDOs), everything is fine. Nothing bad will happen. What happen next is that no one takes responsibility of any risk.
(2) Although the clients signed a 'contract'. Probably they do not have any idea of what the investment product is about after all. They signed it merely based on their belief of 'it looks fine'. They are driven by promised return.

One of the flaws in (1) and (2) may be caused by greediness of both parties. Financiers are only driven by commission. Clients are driven by promised return.

Other possible party to be blamed is financial regulator. They need to revise the regulation so that risks are well taken care of. Incentive scheme should be formulated. Reward and Penalty must be properly defined.

What I would like to emphasize here is I just do not agree when people says banks are devils in this matter. As long as they have provided the necessary information, clients must take its own responsibility. Whatever happen (good or bad) are theirs to take. But if financiers are not giving enough information, then financiers are the culprit.