Washington -The financial crisis that engulfed the globe and cost millions of jobs could have been avoided, a US government-appointed panel said Thursday, as they handed the baton over to prosecutors.
After 18 months spent reviewing millions of pages of documents, interviewing around 700 witnesses, the Financial Crisis Inquiry Commission concluded that bankers, lawmakers, regulators and irresponsible borrowers all helped plunge the world into financial panic.
"This financial crisis was avoidable. The crisis was the result of human action and inaction, not Mother Nature or computer models gone haywire," the report concluded.
As such the group said it had recommended that prosecutors investigate "several" individuals who may have broken the law.
"We did make several of those referrals, but we are not going to talk about any of the details," said panel member Brooksley Born.
While skirting the issue of legal wrongdoing, the panel said the United States must accept collective blame for the crisis.
"As a nation, we must also accept responsibility... collectively, but certainly not unanimously, we acquiesced to or embraced a system, a set of policies and actions, that gave rise to our predicament."
Heaping blame on protagonists on Wall Street and in Washington who "ignored warnings, and failed to question, understand and manage the evolving risks within the system," the commission, tasked by Congress and President Barack Obama, said "theirs was a big miss, not a stumble."
The report catalogs, in more than 400 pages, how the mortgage bubble grew, burst and came to infect banks' balance sheets, thanks to the magnifying effect of complex financial derivatives.
"Trillions of dollars in risky mortgages had become embedded throughout the financial system."
The report concluded big-name banks - from Citigroup to Lehman Brothers - as well as lenders like AIG and Fannie Mae, "acted recklessly, taking on too much risk, with too little capital."
The panel painted a bleak picture of corporate culture that placed "risk justification" before "risk management" and where bonuses encouraged quick deals for short-term gains, without regard for the consequences.
The report also lambasted the Federal Reserve's "pivotal failure to stem the flow of toxic mortgages" through its policies of low interest rates and failure to set adequate standards for lending.
Government regulators, they said, "were not at their posts," instead depending on a misplaced faith that markets would "self-correct" and financial institutions would police themselves.
"We do not accept the view that regulators lacked the power to protect the financial system."
But the panel's conclusions were not reached unanimously. The six Democrat-appointed members of the panel endorsed the final text and four Republicans dissented.
That partisan backing is likely to blunt the impact of the report, which comes after US lawmakers have already moved to overhaul Wall Street and a host of books and autobiographies have chronicled events in detail.
But its authors said they hoped the study would help people understand how the crisis could have been avoided.
"The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion it will happen again."
The reaction to the report was mixed, with industry groups crying foul.
The US Chamber of Commerce, which has staunchly opposed Wall Street regulation described it as "yet another missed opportunity to produce an objective, non-partisan look at how to strengthen our financial regulatory system."
The White House praised the commission's work, but did not comment directly on its findings.
"We certainly applaud the efforts of the commission to explore the causes for the financial crisis that occurred in 2008," said spokesperson Robert Gibbs.