Financial crisis rocking Wall St by Ken Mahoney

DINAPOLI SAYS “EXCESSIVE RISK” TO BLAME FOR FINANCIAL CRISIS

New York Comptroller Tom DiNapoli says “excessive risk and over-leveraging of capital” are to blame for the failure of major Wall Street institutions.

Lehman Brothers, Merill Lynch and other financial giants, according to DiNapoli, have fallen into the credit trap by taking on debt carelessly in order to boost short-term health.

The Comptroller is supporting Governor David Paterson’s appeal for the Federal Reserve to provide short-term liquidity to American International Group, referred to as AIG. DiNapoli says news of Lehman Brother’s chapter 11 filing and the $50 billion dollar Merill Lynch buyout are creating a crisis of confidence, which is sucking in firms like AIG.

He says national financial stabilization will only come with more robust regulations and transparency