USA Blame Banking System for
Although David Cameron blamed
Gordon Brown, and now Ed Balls for causing the global recession, the
US Financial Crisis Inquiry Commission, tasked with establishing the
causes of the crisis, said it was "avoidable”.
Regulators, politicians and bankers were to blame for the 2008 US
financial meltdown, the report has claimed.
The report concluded that "The crisis was the result of human
action and inaction, not of Mother Nature or models gone haywire,"
the report said.
"The captains of finance and the public stewards of our [USA]
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. There was no mention of Gordon Brown or Ed
The greatest tragedy would be to accept the refrain that no one could
have seen this coming and thus nothing could have been done”
said Phil Agelides of the Financial Crisis Inquiry Commission .
The report criticised the extent of the financial deregulation overseen
by the former chairman of the Federal Reserve, Alan Greenspan.
According to the F.C.I.S. the crisis was caused by a number of factors:
• Failures in financial regulation, including the Federal Reserve's
failure "to stem the tide of toxic mortgages"
• A breakdown in corporate governance that led to "reckless"
actions and excessive risk taking by financial institutions
• Households taking on too much debt
• A lack of understanding of the financial system on behalf
• Fundamental breaches in accountability and ethics "at
It added that "collapsing mortgage-lending
standards" and the packaging-up of mortgage-related debt into
investment vehicles "lit and spread the flame of contagion".
These complex derivatives, which were traded in huge volumes by major
investment banks, then "contributed significantly to the crisis"
when the mortgages they were based on defaulted.
The report also highlighted the failures of the credit ratings agencies
in recognising the risks involved in these and other products.
Establishing blame was essential in preventing future crises, the
"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," said Phil Angelides, chairman of the commission.
Only the six Democrat members of the 10-strong commission, set up
in May 2009, endorsed the report's findings. All four Republicans
on the commission announced several weeks in advance of the report's
publication that they would not agree with its findings.
Three of them published a separate report that insisted that blame
should be attributed to Mr Greenspan's Federal Reserve. The fourth
produced his own report focusing on the role of government in creating
the housing bubble.
would indicate that the crisis was, as everybody knows, caused by
reckless actions in America, and investment banks worldwide. Not Gordon
Brown, Ed Balls, or even “bad weather”
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