Reporting from Washington — A federal commission created to investigate the financial crisis is pointing the finger at nearly everyone, from overextended homeowners to reckless executives and timid regulators.
"The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire," the Financial Crisis Inquiry Commission said in its majority report to Congress. "To paraphrase Shakespeare, the fault lies not in the stars, but in us."
Despite assigning widespread blame, the Democratic majority's 525-page account also asserts that the near-meltdown didn't have to happen.
The report, released Thursday along with two dissenting reports from the Republican minority, is more synthesis than revelation. But it offers some new details.
The commission disclosed that Federal Reserve Chairman Ben S. Bernanke told it in a private session that, during a two-week period in the fall of 2008, 12 of the 13 largest financial institutions had been at risk of failure.
The report also shares other details and opinions from the more than 700 interviews the panel conducted during its 18-month investigation.
Seeking to explain the housing bubble that ended badly, triggering a global credit crisis and the worst recession in decades, the commission quotes former Countrywide Financial Corp. Chief Executive Angelo R. Mozilo, who last year agreed to pay a record $22.5-million fine to settle a government fraud lawsuit over the lender's near-collapse.
Mozilo told the panel that a "gold rush" mentality had taken over the nation, and that he got swept up in it as well.
"Housing prices were rising so rapidly — at a rate that I'd never seen in my 55 years in the business — that people, regular people, average people got caught up in the mania of buying a house, and flipping it, making money," Mozilo told the commission.
Despite finding plenty of blame to go around, the commission focused its fire on some of the previously identified culprits of the crisis.
The commission hammered executives such as Mozilo and the leaders of investment bank Goldman Sachs Group Inc. for taking too much risk, and government regulators, particularly current and former officials at the Federal Reserve, for allowing it to happen.
"The captains of finance and the public stewards of our financial system ignored warnings and, importantly, failed to question, to understand and to manage the evolving risks in a financial system that's so essential to the well-being of our country," commission Chairman Phil Angelides, a former California state treasurer, said at a news conference Thursday.
But the panel's four Republicans challenged their six Democratic colleagues' conclusions and issued two of their own.
Republican Peter Wallison wrote a 108-page dissent blaming the crisis on government intervention in the housing market, including the support given to mortgage buyers Fannie Mae and Freddie Mac.
The three other GOP members — commission Vice Chairman Bill Thomas, former top George W. Bush economic aide Keith Hennessey and former Congressional Budget Office Director Douglas Holtz-Eakin — put out a 27-page dissent, saying the crisis was the unavoidable result of global economic forces.
The three, saying Angelides led a partisan process designed to produce predetermined results, also challenged the notion that the crisis had many roots.
"If you blame everybody then you don't really provide what I thought … was our primary duty, which was to focus on the causes of this financial crisis," Thomas, a former U.S. representative from Bakersfield, said on a conference call the Republicans held with reporters.
The majority report says "a crisis of this magnitude cannot be the work of a few bad actors."
But the panel ascribed "special responsibility" to certain organizations and individuals in business as well as government.
For example, among the firms that the commission cited for helping to fuel the housing bubble was Ameriquest Mortgage Co. of Orange. It was the nation's largest subprime lender in the early part of the housing boom before an investigation by 49 state attorneys general into allegations of deceived borrowers, falsified loan documents and overstated home appraisals led to a $325-million settlement in 2006.
The majority report also criticizes key Fed officials — former Chairman Alan Greenspan, current chief Bernanke and Treasury Secretary Timothy F. Geithner, who was head of the Fed's New York bank from 2003 to 2008 — for failing to identify problems that led to the crisis.
The commission's reports, combined into one volume, went on sale nationwide Thursday in printed and e-book versions. The reports also are available free on the commission's website, at http://www.fcic.gov.
Angelides held up a copy of the report several times at Thursday's news conference, noting that the tome was "available wherever books are sold."
"We hope the American people will read this report because it is our belief if we do not learn from history we are unlikely to fully recover from it," he said.
It's not clear whether the reports will be as widely read as the conclusions of the federal 9/11 commission's report, which became a bestseller.