The findings of the US Financial Crisis Inquiry Commission were presented by its chairman Phil Angelides to the European Parliament’s Financial, Economic and Social Crisis Committee on Monday afternoon. MEPs found its account of the causes of the crisis plausible, and stressed the need for EU-US co-operation to help overcome it.
“How did it come to pass that in 2008 we were forced to choose between two stark and painful alternatives – either risk the total collapse of our financial system and economy – or inject trillions of taxpayers dollars into the system and into private companies – even as millions of people still lost their jobs, their savings and their homes?” asked US Financial Crisis Inquiry Committee Chairman Phil Angelides, before outlining a serious of failures that led to the collapse.
The US Commission’s final report, presented on 27 January, concluded that the crisis was “avoidable”. Its causes included “widespread failures” in financial regulation and supervision as well as in corporate governance and management, which allowed the formation of an “explosive brew of excessive borrowing, risky investments and lack of transparency”. The crisis itself was triggered by “breaches in accountability and ethics”, but key policy makers were clearly “ill prepared” for it.
International co-operation and lessons learned
MEP Sirpa Pietikäinen (EPP, FI) asked for “concrete suggestions as to how to go forwards” in international co-operation as the “G20 is not very active”. Mr Angelides conceded that “more extensive co-operation between regulatory bodies” is needed.
“We should be standing up to the markets”, and “we have to come back to the concept of democracy” so as always to have “a counterweight” to them, said Parliament’s Crisis Committee rapporteur Pervenche Berès (S&D, FR), in her comments on the US presentation.
“We are on the same wavelength” notably on the “causes” of the crisis, its “social element” and the “fact that serious imbalances exist”, said committee chair Wolf Klinz, summing up the debate. “Like you, we are convinced that we are nowhere near exiting this crisis. We shall need to co-operate with you”, although “we are not going to get everyone in the G20 to agree. But certainly the US and the EU should walk forward hand in hand”, he concluded.
Background on the EP Crisis Committee
Parliament’s Financial, Economic and Social Crisis Committee was set up in late 2009 to assess the impact of the financial crisis on the EU and its Member States and to propose measures for the long-term rebuilding of healthy and stable financial markets, in order to support sustainable growth and employment.
The Committee’s final report will be put to a committee vote in May 2011 and a plenary vote in July.