Bankers Believe "Lax Underwriting Standards" Main Cause of Credit Crisis.

Fair value accounting doesn't make list of top five causes for the credit crisis

CHICAGO -- When it comes to the reasons for the current credit crisis, bankers choose "lax underwriting standards," "political emphasis on increasing home ownership" and "lack of oversight of the mortgage

Notably, only 15 percent of bankers selected the much-maligned fair value accounting standard as one of their three top choices as the main cause of the credit crisis, with only "mortgage fraud" having a lower response (11%).

"I think bankers understand that fair value accounting affects only a portion of the balance sheet and by itself it did not cause the current crisis," said Dorsey Baskin, a partner in Grant Thornton's National Professional Standards Group. "Nevertheless, efforts underway to revisit this and related issues such as 'other than temporary impairment' are very welcome."

What do you think are the main causes of the credit crisis? (Select up to three)

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About the survey

Grant Thornton LLP conducted the national survey in conjunction with Bank Director magazine from November 5th through December 10th, 2008 with 339 chief executive officers and other senior officers of banks and savings institutions responding.

About Grant Thornton LLP

Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd.

About Bank Director

Bank Director magazine is the premier information resource written exclusively for directors of financial companies. Quarterly issues focus on the information board members need on the hottest topics in banking.