Saturday, January 29, 2011

FCIC Blames Government, Wall St Execs

The Financial Crisis Inquiry Commission, established to investigate the economic collapse, released its final report. Not surprisingly (because we all knew who was to blame) they found the crisis could have been avoided, but those who could have done something ignored the warnings and failed to act. Frankly, the names of Robert Rubin, Alan Greenspan, Ben Bernanke and Timothy Geithner come up far too often for comfort. Not to mention that of Citigroup/Citibank, who are spotlighted more than a number of times as a primary culprit.

Quoting from the report:

"In November 1999, Congress passed and President Clinton signed the Gramm-Leach-Bliley Act (GLBA), which lifted most of the remaining Glass-Steagall-era restrictions...The New York Times reported that Citigroup CEO Sandy Weill hung in his office a 'hunk of wood - at least 4 feet wide - etched with his portrait and the words 'The Shatterer of Glass-Steagall.'...John Reed, former co-CEO of Citigroup acknowledged to the FCIC that, in hindsight, 'the compartmentalization that was created by Glass-Steagall would be a positive factor,' making less likely a 'catastrophic failure' of the financial system."

In other words, Citi, by admission of Weill and testimony of Reed, is solely responsible for the removal of legislation in 1999 that could have prevented the economic collapse. Go figure, but we, the American taxpayers, had already figured out what the FCIC has ultimately concluded. Fully thorough but understandable, the report is nonetheless frightening in its scope of what did happen...and what very well could have happened.

(Read the full report here.)

©2011 Steve Sagarra

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