Executives from four major financial firms testified today before the recently formed Financial Crisis Inquiry Commission, which is tasked with reporting to Congress and the White House on the causes of the financial crisis. And in an acknowledgment that banks made mistakes that contributed to the financial collapse, the executives of Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS) and JP Morgan Chase (JPM) said regulatory changes should focus on creating a system that empowers regulators, while safeguarding the value of risk capital, “the heart of market capitalism,” Goldman chairman and CEO Lloyd Blankenfein said in prepared testimony. BofA’s new CEO Brian Moynihan said bankers have learned some hard lessons from the recent financial crisis. “First and foremost is humility: at its core, our job is to manage risk, but many banks made business judgments that managed risk poorly,” he said. “Credit must start with sound underwriting, and rating agencies are no substitute for quality loan officers and diligent and independent risk analysts.” Moynihan said it would be helpful to have a systemic risk regulator, but the industry should not overestimate the ability of government officials to anticipate and correct systemic problems. “Rather than trying to spot black swans, regulatory efforts may be more constructively directed at developing systems to prevent any crisis from metastasizing,” he said. Despite the called for restraint on the part of regulators, Moynihan said he believes “there will always be need for a government liquidity backstop in case of a crisis.” Write to Austin Kilgore.