Panel revisits the financial meltdown

TEXT OF INTERVIEW

Steve Chiotakis: In Washington today, the Financial Crisis Inquiry Commission meets once again. This is the panel that was set up by Congress and the president to look into what led to the financial meltdown. Marketplace's Gregory Warner is with us live from WHYY, just down the road from New York in Philadelphia this morning, he's got the latest. Good morning, Gregory.

Gregory Warner: And it's snowing here, too.

Chiotakis: Yeah, a lot of snow on the East Coast. All right so Gregory, remind us again, what is this panel and what are they supposed to be doing? I mean this was modeled after the 9-11 commission, right?

Warner: Right, and it was to figure out not just what led to the crisis on Wall Street, but why, and who's accountable for all the risky instruments that took the market down. I spoke to James Angel from Georgetown University:

James Angel: It's not just the complexity of the instruments, it was the complacency of everyone thinking that somebody else had figured out the risk was low.

And this is the challenge, he says, because everyone bears some of the blame. Mortgage lenders who made the fraudulent loans, the rating agencies who were stamping triple-A on things that shouldn't have been, and the investment banks, of course, that packaged them.

Chiotakis: Now this is Day 2 of the hearings, how are things going so far?

Warner: Well today and tomorrow, it's the professor's turn; some of the most respected economists will address the commission. Last month, it was the CEOs that came before the commission, CEOs of some of the major banks and investment firms. And there was this interesting exchange of last month's hearings where commissioners asked the CEO of Goldman Sachs, Lloyd Blankfein, how he could have sold these bundles of troubled mortgages to investors while at the same time placing bets that they would fail. And Blankfein essentially answered: buyer beware.

Chiotakis: Haha. Well, Marketplace's Gregory Warner in Philadelphia. Gregory, we do thank you.

Warner: My pleasure.

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