Inquiry Concludes: Financial Crisis Was Avoidable

Corporate mismanagement, excessive risk-taking by Wall Street, and inadequate government regulation caused the 2008 financial crisis, according to a 576-page report by the Financial Crisis Inquiry Commission, due to be released today. The report blames policies by both the Clinton and Bush administrations, Fed chairmen Alan Greenspan and Ben Bernanke, and regulators, who the report says lacked "the political will" to hold accountable an industry that spent $2.7 billion on lobbying from 1999 to 2008. Among its other conclusions, as reported by the New York Times:

• Democrats' 2000 decision to shield over-the-counter derivatives from regulation was "a key turning point in the march toward the financial crisis."
• The New York Fed, run by Tim Geithner at the time of the crisis, should have spotted problems at Citigroup and Lehman, though it was not primarily responsible for doing so.
• It concludes that the following weren't to blame: the low interest rates instituted by the Fed after the 2001 recession, Fannie Mae and Freddie Mac, and the “aggressive homeownership goals” the government set as part of a “philosophy of opportunity.”
• The commission's findings have divided along party lines: All six Democrats have signed off on the report, but three of the four Republicans will publish their own findings, which emphasize the role of government in the crisis and downplay that of big business; the fourth will offer yet another story, blaming Fannie Mae and Freddie Mac.

(More financial crisis stories.)