One dissenting opinion to the Financial Crisis Inquiry Commission blames the “shock and panic” in the markets in September 2008 for expediting the quick collapse of the global economy.
The FCIC report largely credits the regulatory shortcomings of the U.S. government and extreme risk taking of the nation’s largest financial institutions for the current economic turmoil.
Another opinion, however, says the scope is much, much larger than that.
The FCIC report on the causes of the Great Recession is itself barely a majority opinion. It represents the findings of six of 10 board members. Three of the remaining four issued a dissent Wednesday ahead of the FCIC official release. The remaining dissent, from Peter Wallison of the American Enterprise Institute, will be covered on HousingWire later today.
The three dissenters, Vice Chairman Bill Thomas, Keith Hennesey and Doug Holtz-Eakin, list 10 reasons for the current financial hardships.
Among their reasons, perhaps the single largest contributor came September 2008 when the “failures, near-failures, and restructurings of 10 firms triggered a global financial panic,” they write.
“Confidence and trust in the financial system began to evaporate as the health of almost every large and mid-size financial institution in the United States and Europe was questioned,” according to the dissenting opinion they wrote.
The shock then triggered a severe contraction in street-side economies, the harm of which continues today.
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