[ by Melanie Gretchen ]

"There were five safety valves that usually keep things under control that all failed."

The Dodd-Frank Act won't be enough to prevent a future financial crisis, just as regulatory failures caused 2008's, two bank executives told CNBC on Wednesday.  Bill Isaac, former FDIC chair, and Richard Kovacevich, former CEO of Wells Fargo, said the system has failed to act in the interests of the market.

"I will tell you that this crisis we went through, financial crisis, did not have to happen." -- Mr. Isaac, in an interview.

Who's to Blame

• the credit ratings agencies
• Fannie and Freddie Mac
• the SEC
• bank regulators
• state regulators

What Happened. Mr. Kovacevich traced a path to our current state.  Credit rating agencies rated and sold mortgage-backed securities created by the investment banks.  Fannie and Freddie guaranteed many of these subprime mortgages, and the SEC and statge regulators failed in their respective regulation of the credit agencies and the investment banks, and the mortgage brokers.

Mr. Isaac added to Mr. Kovacevich's list to point the finger at:

• the Federal Reserve
• the Basel capital accords
• the OCC

"We need to sensible reform and it begins with the regulators.  We do need to have a much stronger, simpler regulatory system."

For furhter details, go to [CNBC, 9/12/12].