Top US bankers Wednesday acknowledged mistakes that led up to the global financial crisis as a special commission launched its inquiry into the economic calamity. The congressionally mandated 10-member panel, which has been compared to the 9/11 panel that studied the September 11, 2001 terror attacks on the United States, began its first hearings on Wednesday. Brian Moynihan, the new chief executive and president of Bank of America, acknowledged that the banking industry 'caused a lot of damage' over the course of the crisis which led to the government pumping hundreds of billions of dollars into the firms to keep them afloat. 'Never has it been clearer how mistakes made by financial companies can affect Main Street, and we need to learn the lessons of the past few years,' said the head of the largest US bank measured by assets. Morgan Stanley chairman John Mack said that in retrospect, many firms were 'too highly leveraged, took on too much risk and did not have sufficient resources to manage those risks effectively in a rapidly changing environment.' 'While we were able to withstand the crisis and I believe emerge as a stronger institution, we, like many others, made mistakes,' admitted Jamie Dimon, chairman and chief executive of JPMorgan Chase. Phil Angelides, chairman of the the Financial Crisis Inquiry Commission, said the forum 'may be our last best chance to take stock of what really happened so that we can learn from it and restore faith in our economic system. 'If we ignore history, we're doomed to bail it out again,' said Angelides, a former California state treasurer. The crisis, which peaked in September 2008 triggered by a home mortgage meltdown, sent a financial tsunami across the globe, slamming the brakes on growth and plunging the United States and many other nations into the worst recession in decades. More than seven million Americans lost their jobs in the recession and nearly 25 million Americans are unemployed, underemployed because they could not find full time work, or have given up looking for work, a commission report said. In addition, more than two million families have lost their homes in the last three years and over 10 million have been in the foreclosure process during that period. Goldman Sachs chairman and chief executive Lloyd Blankfein said 'accumulation of risk' was 'the biggest problem' that financial institutions faced ahead of the crisis. 'Because we were accumulating positions, which by the way, we acquired from clients who want to sell them to us, we have to go out ourselves and provide and source the other side of the transactions so that we can manage our risks,' he said. 'These are all exercises in risk management.' But Commission chief Angelides was unmoved, showing his apparent displeasure over the way financial risks were managed. 'Well, I'm just going to be blunt with you,' he said. 'It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars. It doesn't seem to me that's a practice that inspires confidence.' Blankfein cautioned against overregulation. 'Taking risk completely out of the system will be at the cost of economic growth. We know from economic history that innovation -- and the new industries and new jobs that result from it -- require risk taking,' he said. The banking chiefs also addressed public concerns over fat bonuses paid to top executives as compensation practices that critics say fueled the global financial crisis came under scrutiny. 'Many have questioned the extent to which compensation practices at financial institutions incentivized excessive risk taking. I think some of those concerns are quite legitimate,' JPMorgan Chase's Dimon said. Goldman's Blankfein said that 'to avoid misaligning compensation and performance, multi-year guaranteed employment contracts should be banned entirely. 'The use of these contracts, unfortunately, is a common practice in our industry. We should all recognize that they are bad for the long-term interests of our industry and the financial system.' pp/rl 