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KEITH HENNESSEY, DOUGLAS HOLTZ-EAKIN, AND BILL THOMAS 

4. “Risky borrowers” does not mean poor. While many risky borrowers were low-income, a
borrower with unproven income applying for a no-documentation mortgage for a vacation home
was also risky.
5. Bernanke, “Monetary Policy and the Housing Bubble.”
6. The Commission vigorously debated the relative importance and the motivations of the dif-
ferent types of securitizers in lowering credit quality. We think that both types of securitizers were
in part responsible and that these debates are less important than the existence of lower standards
and how this problem fits into the broader context.
7. While bad information created by credit rating agencies was an essential cause of the crisis, it
is less clear why they did this. Important hypotheses include: (1) bad analytic models that failed to
account for correlated housing price declines across wide geographies, (2) an industry model that
encouraged the rating agencies to skew their ratings upward to generate business, and (3) a lack of
market competition due to their government-induced oligopoly.
8. In most cases during the crisis, the three key policymakers were Treasury Secretary Henry
Paulson, Federal Reserve Chairman Ben Bernanke, and Federal Reserve Bank of New York Presi-
dent Timothy Geithner. Other officials were key in particular cases, such as FHFA Director Jim
Lockhart’s GSE actions and FDIC Chairman Sheila Bair’s extension of temporary loan guarantees
to bank borrowing in the fall of 2008. During the financial recovery and rebuilding stage that be-
gan in early 2009, the three key policymakers were Treasury Secretary Timothy Geithner, Fed
Chairman Ben Bernanke, and White House National Economic Council Director Larry Summers.
9. Ben S. Bernanke, testimony before the FCIC, Hearing on Too Big to Fail: Expectations and
Impact of Extraordinary Government Intervention and the Role of Systemic Risk in the Financial
Crisis, session 1: The Federal Reserve, September 2, transcript, p. 78.