The report of the Financial Crisis Inquiry Commission is out on what caused the 2008 economic crash and the current Great Recession. Although the commission is not unanimous — and Republicans on it have issued a dissenting opinion — the report says that the crash was foreseeable and preventable.
The report by the Financial Crisis Inquiry Commission draws on more than 700 interviews, millions of e-mail exchanges and other records that have not previously been disclosed.
While the official 633-page document comes after the Dodd-Frank law tightened up financial regulation, its findings are certain to be pored over for years — and not just by historians.
On Wall Street, analysts were already scouring 1,200 supporting documents the panel released on its Web site; an additional 700 documents and some 300 transcripts of audio interviews are to be posted before the panel’s mandate expires Feb. 13.
The report examined the risky mortgage loans that helped build the housing bubble; the packaging of those loans into exotic securities that were sold to investors; and the heedless placement of giant bets on those investments.
Enabling those developments, the panel found, were a bias toward deregulation by government officials, and mismanagement by financiers who failed to perceive the risks.
The Fed, under Mr. Bernanke’s predecessor, Alan Greenspan, failed to develop mortgage lending standards that could have stemmed the flow of bad mortgages into the financial pipeline, the panel found. “The Federal Reserve was clearly the steward of lending standards in this country,” said one commissioner, John W. Thompson, a technology executive. “They chose not to act.”
The GOP response seems to be based on the premise that the report doesn’t say what they want it to say, so it’s wrong.