Washington - Wall Street's top bankers on Wednesday faced a
confrontational congressional panel tasked with getting to the bottom
of a financial crisis that plunged the world into a devastating
recession.
But they offered few apologies for the misery unleashed over the
last two years.
The executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley
and Bank of America characterized Wall Street's collapse as a crisis
that was decades in the making. They did admit failing to heed
warning signs.
Goldman Sachs chief executive Lloyd Blankfein described a
'systemic lack of skepticism' that allowed Wall Street to continue
borrowing massive amounts of money at cheap interest rates, digging
itself into deeper credit holes, until the music screeched to a halt
with the collapse of Lehman Brothers in September 2008.
'Over the course of this crisis, we as an industry caused a lot of
damage,' Bank of America chief Brian Moynihan conceded.
Blankfein was caught in a dramatic and heated opening exchange
with Phil Angelides, a former California politician appointed to head
the Financial Crisis Inquiry Commission, a bipartisan panel
established by Congress to investigate the roots of the crisis.
'People are angry. They have a right to be,' Angelides said. 'The
fact is that Wall Street is (getting) record profits and bonuses in
the wake of receiving trillions of dollars in government assistance
while so many families are struggling to stay afloat.'
The bankers' testimony came on the first of two days of hearings
before the commission, which is expected to hold more sessions
throughout the year. The panel has been compared to the Pecora
hearings that investigated the causes of the Great Depression in the
1930s.
The crash forced the US government to bail out Wall Street to the
tune of 700 billion dollars in October 2008, but that did not prevent
dozens of smaller banks from declaring bankruptcy across the country.
The US fell into its worst economic downturn since the Great
Depression and is still struggling with an unemployment rate of 10
per cent, the highest in more than 25 years.
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