Wall Street executives admit mistakes before financial crisis

"There's no doubt we as an industry made mistakes," said John Mack, chairman of Morgan Stanley.

Goldman Sachs Chief Executive Lloyd Blankfein said large financial institutions didn't realize the risks they were taken as they invested more heavily in the residential housing market during the real estate boom in the early 2000s. His firm and others rationalized the increasing risks of lowered credit standards, part of a "systemic lack of skepticism," he said.

"We lent money out too cheaply and in certain loans without the traditional safeguards," Blankfein said. "We didn't realize early enough that risk was being mispriced."

They were among the witnesses as the Financial Crisis Inquiry Commission began the public portion of its investigation. Also testifying were Jamie Dimon, chief executive of JPMorgan Chase, and Brian Moynihan, the new chief executive of Bank of America.

"We're after the truth, the hard facts. . . . People are angry. They have a right to be," Phil Angelides, the commission's chairman, said in kicking off two days of hearings. "If we ignore history, we're doomed to bail it out again."


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