The financial crisis that wreaked havoc on the economy was "the result of human action and inaction, not of Mother nature or computer models gone haywire," a government commission that spent 18 months studying the crisis concluded.
The majority report of the 10-member Financial Crisis Inquiry Commission criticized the Federal Reserve for not stemming the flow of bad mortgages and the Securities and Exchange Commission for not requiring the large banks to have more capital and stop risky practices.
The report , which was released today, said a 30-year policy of deregulation "stripped away key safeguards, which could have helped avoid catastrophe." This caused gaps in the government's regulation of the shadow banking system and over-the-counter derivatives markets.
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