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Private, Public Failures Blamed For Crisis
Tuesday, 25-Jan-2011 8:34PM United Press International
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WASHINGTON, Jan. 25 (UPI) -- A U.S. commission has concluded failures by private industry and "public stewards" were the main causes of the 2008 financial crisis, The New York Times says.

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The newspaper reported Tuesday it had examined the final report of the Financial Crisis Inquiry Commission, expected to be released Thursday as a 576-page book. The commission will say the meltdown was "avoidable" and was caused by corporate mismanagement, unduly risky behavior on Wall Street and failures on the part of government regulators.

The commission report singles out former Federal Reserve Board Chairman Alan Greenspan and current Chairman Ben Bernanke and concludes U.S. regulators "lacked the political will" to hold to account the financial institutions they are responsible for regulating, the Times said.

The report also finds fault with a decision in 2000, toward the end of President Bill Clinton's administration, to protect certain derivatives from regulation, calling that "a key turning point in the march toward the financial crisis." The commission determined that mortgage lending practices and risky investments in securities backed by the packaging and sale of loans contributed to the crisis.

"The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done", the commission concluded. "If we accept this notion, it will happen again."

The commission conducted extensive hearings in 2009, with testimony from more than 700 witnesses.

Six of the panel's 10 members, all appointed by Democrats, have endorsed the final report, the Times said. Three members appointed by Republicans will issue a dissent and a fourth Republican appointee has prepared his own dissent, blaming the crisis on policies intended to expand homeownership.

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