Crisis Panel Report Pins Blame on Wall Street, Federal Regulators
By Robert Schmidt and Phil Mattingly - Jan 26, 2011 1:27 PM ET
The congressionally appointed panel assigned to probe the origins of the 2008 credit crisis heaped blame on greedy Wall Street firms and hapless federal banking regulators, concluding the meltdown could have been avoided.
“The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public,” the Financial Crisis Inquiry Commission wrote in a 545-page book outlining its conclusions. “Theirs was a big miss, not a stumble.”
The findings, to be officially released tomorrow, were only endorsed by the commission’s Democratic majority. The four Republican members issued two separate assessments that accused Democrats of writing a long, narrative account of what happened in the crisis while failing to uncover what actually caused it.
The partisan bickering and divided report makes it more likely that the group’s work will have little impact on regulatory policy, people who have followed the commission said. Last year’s passage of the biggest financial-rules overhaul since the 1930s and the return to profitability of banks that got billions of dollars in U.S. aid further undermined the panel’s relevance.
When it was created by Congress in 2009, the FCIC was heralded as the best chance of finding clear answers to what caused the credit crisis and holding wrongdoers accountable. Lawmakers compared it to the commission that investigated the Sept. 11 attacks, which after a series of hearings came out with unanimous recommendations that spurred new policies.
The FCIC has been headed by former California treasurer Phil Angelides. Other Democratic members included former Commodity Futures Trading Commission chief Brooksley Born and ex-U.S. Senator Bob Graham of Florida. Former congressman Bill Thomas of California led the Republican side.