https://www.richardcleaver.com/wp-content/uploads/2015/02/rcdotcomlogo.png 0 0 Richard Cleaver https://www.richardcleaver.com/wp-content/uploads/2015/02/rcdotcomlogo.png Richard Cleaver2011-01-27 12:02:422011-01-27 12:05:26Financial Crisis Part II
Financial Crisis Part II
“As a scholar of the Great Depression, I honestly believe that September and October of 2008 was the worst financial crisis in global history, including the Great Depression”
— Ben Bernanke, Federal Reserve Chair, November 2009
The report by the Financial Crisis Inquiry was released today. Looks like I was pretty close. The major conclusions:
- The financial crisis was avoidable
- Widespread failures in financial regulation and supervision proved devastating to the stability of the nation”™s financial markets
- Dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis
- A combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis
- The government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets
- There was a systemic breakdown in accountability and ethics
- Collapsing mortgage-lending standards and the mortgage securitization pipeline lit and spread the flame of contagion and crisis
- Over-the-counter derivatives contributed signiicantly to this crisis
- The failures of credit rating agencies were essential cogs in the wheel of financial destruction
The pdf of the report’s conclusions can be found here.
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