Crisis Panel’s Report Parsed Far and Wide

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By SEWELL CHAN
Published: January 27, 2011


WASHINGTON — Behind closed doors, Ben S. Bernanke, the Federal Reserve chairman, called it “the worst financial crisis in global history, including the Great Depression.”

He said that 12 of the country’s 13 most important financial institutions, including Goldman Sachs, had been on the verge of collapse “within a week or two.” (The apparent exception: JPMorgan Chase.)

Imagining the impact of a Citigroup bankruptcy, he recalled, was “sort of like saying, ‘Well, four out of your five heart ventricles are fine, and the fifth one is lousy.’ ” (The human heart actually has two.)

Mr. Bernanke’s remarks, from a November 2009 interview with government investigators, were among the fresh details in the blow-by-blow chronicle of regulatory negligence and Wall Street recklessness released Thursday by a federal commission.

The report by the Financial Crisis Inquiry Commission draws on more than 700 interviews, millions of e-mail exchanges and other records that have not previously been disclosed.

While the official 633-page document comes after the Dodd-Frank law tightened up financial regulation, its findings are certain to be pored over for years — and not just by historians.

On Wall Street, analysts were already scouring 1,200 supporting documents the panel released on its Web site; an additional 700 documents and some 300 transcripts of audio interviews are to be posted before the panel’s mandate expires Feb. 13.

The report examined the risky mortgage loans that helped build the housing bubble; the packaging of those loans into exotic securities that were sold to investors; and the heedless placement of giant bets on those investments.

remainder: http://www.nytimes.com/2011/01/28/business/economy/28inquiry.html?src=me&ref=business

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1. K & R

This is important

[Jefferson23]

2. Thank you, I certainly agree. n/t