Crisis Panel: Wall Street Missed Warning Signs
Wall Street Journal reports:
One of the most important findings in a blue-ribbon panel report on the 2008 financial crisis is that more steps could have been taken to help prevent the meltdown, Financial Crisis Inquiry Commission Chairman Phil Angelides said Thursday.
"Despite the expressed view of many on Wall Street and in Washington that the crisis could not have been foreseen or avoided, there were warning signs," Mr. Angelides said. "The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again."
The commission's final report, which the panel sent to President Barack Obama Thursday, concluded the crisis was caused by widespread failures in financial regulation, such as the Federal Reserve's failure to stem the tide of toxic mortgages. Corporate-governance issues and "an explosive mix of excessive borrowing" contributed to the crisis as well, the report found.
In addition, the report said key policy makers simply weren't prepared for the meltdown and there were "systemic breaches in accountability and ethics at all levels."
The 10-member commission reviewed millions of pages of documents and conducted interviews with more than 700 witnesses. The panel held 19 days of public hearings in communities across the country.
Still, not all members of the panel agreed with the findings.
"Instead of pursuing a thorough study, the commission's majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions that the crisis was caused by 'deregulation' or lax regulation, greed and recklessness on Wall Street, predatory lending in the mortgage market, unregulated derivatives and a financial system addicted to excessive risk-taking," Peter Wallison, a Republican-appointed commission member who is also a fellow at the American Enterprise Institute, wrote in his dissent.
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