Thursday, February 17, 2011
The Financial Crisis Inquiry Report
Posted by David Smith at 04:00 PM
Category: Thoughts and responses

fincrin.jpg

Having been down this road myself, with my book The Age of Instability, I was interested to read the "official" American version, The Financial Crisis Inquiry Report, just published in Britain.

It agrees with me (at least the majority of commissioners do) that trying to pin the blame on successive American governments' home-ownership policies and the Community Reinvestment Act (CRA) does not wash. CRA loans only accounted for 6% of all subprime loans and were half as likely to default as the others.

Where I disagree is over Lehman Brothers. It says the failure of Lehman was only one of many events in the dark days of September 2008, I say it was the pivotal one. It says the US authorities could have done nothing to prevent Lehman failing; I say a guarantee to Barclays would have satisfied the UK regulators.

Anyway, the book is worth reading, and is available here.