In the past few days we have seen the New York Attorney General filing a civil fraud lawsuit against JPMorgan over mortgage-backed securities packaged and sold by Bear Stearns, which JP Morgan bought in March 2008.
The importance of trust in the financial system cannot be over-emphasised, because without it the financial system breaks down, and without an efficiently working financial system, the economy will not operate effectively. A lack of trust in banks or in financial markets can undermine the system as a whole.