Thursday, January 27, 2011

Financial Meltdown Was 'Avoidable,' Crisis Panel Finds

According to a new report written by Democrats on a panel that investigated the financial collapse and bailouts, the meltdown could have been avoided. In fact, the group is blaming both Washington and top financial firms for the crisis. Small comfort for people who lost everything…

Huffington Post reports:

    The Democratic majority of the 10-member Financial Crisis Inquiry Commission spreads the blame widely to regulators, politicians, financial firms and credit rating agencies.

    "We conclude this financial crisis was avoidable," the report said.

    It said regulators failed to adequately police financial markets, that financial firms had poor risk management and corporate governance practices, and that government was ill-prepared to handle the fallout from excessive borrowing when loans soured.

    "The crisis was the result of human action and inaction, not Mother Nature or computer models gone haywire," the draft report reads. "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 report will be officially released on Thursday but it has been endorsed only by the congressionally appointed panel's six Democratic commissioners. Three Republican members will release a separate minority report and a fourth Republican plans to unveil a report of his own that will focus on government housing policies.

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