Investigation concludes financial crisis could have been avoided

| January 28, 2011 | 0 Comments
Investigation concludes financial crisis could have been avoided

The US Financial Crisis Inquiry Commission has concluded that the financial crisis of 2008 could have been prevented.

The investigation into the crisis, which was overseen by Alan Greenspan - former chairman of US central bank, the Federal Reserve, saw over 700 witnesses interviewed.

The 10-member Commission, established in May 2009, said Government officials and bankers failed to see the warning signs and understand and manage evolving risks within the financial system.

The report said: “The crisis was the result of human action and inaction, not of Mother Nature or models gone haywire.”

The report also said that “collapsing mortgage-lending standards……lit and spread the flame of contagion.”

Mr Greenspan was also accused in the report of “championing” financial deregulation during the credit boom that “stripped away key safeguards”.

The Bush and Clinton administrations, the current and previous chairmen of the Federal Reserve chairmen, as well as Treasury Secretary Timothy Geithner are all somewhat responsible for allowing the crisis to happen, the Commission 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 report said.

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