In January 2011, a 10-member US Congressional commission chaired by former California State Treasurer Philip L. Angelides delivered a damning 662 page report that concluded, among other things, that the 2008 global financial meltdown was avoidable, the result of human action and inaction.
The report noted, in bold-faced type, that there was widespread failure in financial regulation and supervision and dramatic failures of corporate governance and risk management at important financial institutions, that a combination of excessive borrowing, risky investment and lack of transparency put the financial system on a course for crisis.
The government, the report found, was ill prepared for the crisis and there was a systemic breakdown in accountability and ethics, collapsing mortgage-lending standards and the mortgage securitization pipeline; over-the-counter derivatives contributed significantly to the crisis and credit rating agencies failed to do their jobs.
That was three and a half years ago. The report, the Financial Crisis Inquiry Report issued by the US Senate Homeland Security Permanent Subcommittee on Investigations, might well have been put onto a little boat and sailed off the end of the earth despite the anguished cries of the bankers. It is extremely well-written, containing phrases like this: “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. Theirs was a big miss, not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us.” Full story...
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The report noted, in bold-faced type, that there was widespread failure in financial regulation and supervision and dramatic failures of corporate governance and risk management at important financial institutions, that a combination of excessive borrowing, risky investment and lack of transparency put the financial system on a course for crisis.
The government, the report found, was ill prepared for the crisis and there was a systemic breakdown in accountability and ethics, collapsing mortgage-lending standards and the mortgage securitization pipeline; over-the-counter derivatives contributed significantly to the crisis and credit rating agencies failed to do their jobs.
That was three and a half years ago. The report, the Financial Crisis Inquiry Report issued by the US Senate Homeland Security Permanent Subcommittee on Investigations, might well have been put onto a little boat and sailed off the end of the earth despite the anguished cries of the bankers. It is extremely well-written, containing phrases like this: “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. Theirs was a big miss, not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us.” Full story...
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