A 650-page report entitled "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," was released yesterday by the Senate Permanent Subcommittee on Investigations and it described "business practices that were rife with conflicts during the mortgage mania and reckless activities that were ignored inside the banks and among their federal regulators," according to an article in today's edition of The New York Times by Gretchen Morgenson and Louise Story.

"The result of two years' work," the article said, "the report focuses on an array of institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit ratings agencies Standard & Poor's and Moody's Investors Service; and the investment banks Goldman Sachs and Deutsche Bank."

In an interview, Senator Carl Levin, Democrat of Michigan, said that "the report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions," adding that "the overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest."

"The bipartisan report includes 19 recommendations for changes to regulatory and industry practices. These include crating strong conflict-of-interest policies at the nation's banks and requiring that banks hold higher reserves against risky mortgages. The report also asks federal regulators to examine its findings for violations of laws. The report adds significant new evidence to previously disclosed material showing that a wide swath of the financial industry chose profits over propriety during the mortgage lending spree. it also casts a harsh light on what the report calls regulatory failures, which helped deepen the crisis. Singled out for criticism is the office of Thrift Supervision, which oversaw some of the nation's most aggressive lenders, including Countrywide Financial, IndyMac and Washington Mutual." the article continued.

From 2004 to 2008, the regulatory office found more than 500 serious deficiencies at Washington Mutual, yet did not force the bank to improve its lending operations, the report maintained, adding that "when the Federal Deposit Insurance Corporation, the bank's backup regulator, moved to downgrade the bank's safety and soundness rating in September 2008, John M. Reich, the director of the Office of Thrift Supervision, wrote an angry e-mail to a colleague. Referring to Sheila Bair, the F.D.I.C. chairwoman, he wrote: "I cannot believe the continuing audacity of this woman." Washington Mutual failed tow weeks later.

Senator Levin said that his committee found "3,400 places in Goldman Sachs documents where its officials used the phrase 'net short,' a reference to negative bets." 'Why would Goldman deny what was so obvious that were engaged in a huge short in the year 2007," he said. "Because they gained at the expense of their clients and they used abusive practices to do it."

An article in the Wall Street Journal today by Carrick Mollenkamp and Liz Rappaport said that the report "alleged that in 2004 the chief risk officer at Seattle lender Washington Mutual signaled concerns about housing prices falling and loose lending standards."

"The report said the office was called 'Dr. Doom' and issued a 2004 memo that said that poor underwriting 'will come back to haunt us.' His warnings went unheeded, the report said. Washington Mutual's senior management did nothing to stop the lending practices at the lender's loan offices in Southern California even after the bank conducted an internal investigation in 2005 that found 'an extensive level of loan fraud,' according to a Washington Mutual internal memo cited in the Senate report," the article said.