Democracy Now: Inquiry: Financial Crisis “Avoidable,” Causes Still Intact

The official government panel investigating the causes of the nation’s financial crisis has released its final report. Unveiling the findings, Financial Crisis Inquiry Commission Chair Phil Angelides said the crisis was “avoidable” and resulted mostly from widespread regulator failure and corporate misdeeds.

Phil Angelides: “This financial crisis could have been avoided. Let us be clear: this calamity was a result of human action, inaction and misjudgment–not of mother nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and importantly failed to question to understand and to manage the evolving risks in a financial system that is so essential to the well being of our country. Theirs was a big miss, not a stumble.”

The commission says it has referred potential violations of the law by financial industry figures and corporations to the U.S. Department of Justice and state attorneys general. Commission member John Thompson blamed a combination of deregulation and inaction at the federal level.

John Thompson: “The Federal Reserve was clearly the steward of lending standards in this country. They chose not to act. The Federal Reserve Bank of New York certainly could have reigned in what was being done in some of the large money center banks in New Yrok. I mean on, and on, and on. Regulator after regulator, they either chose not to act or turned a blind eye to what was actually going on. So, it’s less about a particular individual than a systematic sense of deregulation and inaction by those who were in power to take action.”

Looking ahead, commission member Byron Georgiou warned that the basic structures of the financial system that led to the collapse remain firmly in place.

Byron Georgiou: “Our financial system is really not very different today in 2011 than it was in the run-up to this crisis in 2006 and 2007. In fact, the concentration of financial assets in the largest commercial and investment banks is really significantly higher today than it was in the run-up to the crisis, as a result of the evisceration of some of the institutions, and the consolidation and merger of others into larger institutions.”

~ by wheresthemic on January 28, 2011.

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