[beezle]

Your understanding of the HTM portfolio (and reasons for it) are clearly not complete and no, not anyone in risk management will say their risk team should be in jail (excepting the case of documents proving the failure to hedge was done specifically to increase executive compenstation/bonuses). Calling into question the lack of hedging or use of MBS is fair game and not something most other institutions would have done.

For the record, "1 year treasury bonds" are 52 week Treasury Bills. They would not be buying off the run old debt.