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DISSENTING STATEMENTISSENTING STATEMENT
they operated in different regulatory and supervisory regimes than U.S. com-
mercial and investment banks. In many cases these European systems have
stricter regulation than the United States, and still they faced financial firm fail-
ures similar to those in the United States.

These facts tell us that our explanation for the credit bubble should focus on fac-
tors common to both the United States and Europe, that the credit bubble is likely an
essential cause of the U.S. housing bubble, and that U.S. housing policy is by itself an
insufficient explanation of the crisis. Furthermore, any explanation that relies too
heavily on a unique element of the U.S. regulatory or supervisory system is likely to
be insufficient to explain why the same thing happened in parts of Europe. This
moves inadequate international capital and liquidity standards up our list of causes,
and it moves the differences between the regulation of U.S. commercial and invest-
ment banks down that list.
Applying these international comparisons directly to the majority’s conclusions
provokes these questions:

• If the political influence of the financial sector in Washington was an essential
cause of the crisis, how does that explain similar financial institution failures in
the United Kingdom, Germany, Iceland, Belgium, the Netherlands, France,
Spain, Switzerland, Ireland, and Denmark?
• How can the “runaway mortgage securitization train” detailed in the majority’s
report explain housing bubbles in Spain, Australia, and the United Kingdom,
countries with mortgage finance systems vastly different than that in the
United States?
• How can the corporate and regulatory structures of investment banks explain
the decisions of many U.S. commercial banks, several large American univer-
sity endowments, and some state public employee pension funds, not to men-
tion a number of large and midsize German banks, to take on too much U.S.
housing risk?
• How did former Fed Chairman Alan Greenspan’s “deregulatory ideology” also
precipitate bank regulatory failures across Europe?

Not all of these factors identified by the majority were irrelevant; they were just
not essential.
The Commission’s statutory mission is “to examine the causes, domestic and
global, of the current financial and economic crisis in the United States.” By fo-
cusing too narrowly on U.S. regulatory policy and supervision, ignoring interna-
tional parallels, emphasizing only arguments for greater regulation, failing to
prioritize the causes, and failing to distinguish sufficiently between causes and ef-
fects, the majority’s report is unbalanced and leads to incorrect conclusions about
what caused the crisis.
We begin our explanation by briefly describing the stages of the crisis.