The financial crisis has attracted an assortment of accusations including those of irresponsibility, negligence, mendacity and greed. The targets of criticism range from politicians, central bankers, financial regulators, retail bankers, mortgage providers and managers of hedge funds to all the greedy people who borrowed more than they could afford. Probably every one of these groups of people deserves censure, but not all are equally to blame.

British Prime Minister Gordon Brown has done his best to put the blame on the United States for failing to prevent excesses in lending in the subprime market and for not tackling the crisis quickly enough or in the right way. The subprime problem in the U.S. probably was the trigger for the financial crisis and it can be argued that the U.S. Treasury's handling of the crisis was not always wise or sufficiently prompt.

The nationalization of Fanny Mae and Freddie Mac, the main providers of subprime mortgages, without compensation for shareholders and the decision to allow Lehman brothers to become bankrupt certainly did not help.

But, as David Cameron, the leader of the Conservative opposition, has pointed out, Brown has done his best to ignore the fact that his government had encouraged the over-expansion of credit in Britain and permitted, even encouraged, British institutions to give mortgages of over 100 percent of the value of properties.

Brown may have shown unusual decisiveness in recapitalizing British banks, but the way in which this has been done has been damaging to insurers, pension funds and individual investors who had been led to believe that bank shares were a safe investment providing a good yield. The banks, (RBS, Lloyds and HBOS) which are being recapitalized by government purchase of preference shares paying 12 percent and of a large numbers of ordinary shares, have been told not to pay any dividends until the preference shares have been repaid. There are accordingly few takers for shares in the part nationalized banks, and pension funds face increasing difficulty in meeting their obligations to pensioners.

Central bankers have been criticized for their failure to foresee the crisis and for responding to it too slowly and inadequately. The financial regulators have been accused of being asleep on the job. Why did they permit the banks and other financial institutions to compete to provide mortgages at more and more competitive prices without demanding adequate deposits or investigating properly the ability of borrowers to repay? Why did they not insist earlier that banks increase their equity and reduce their leverage? Why did they not demand greater transparency in off-balance sheet transactions and over the ever increasingly complicated derivatives?

The credit rating agencies have been criticized for not foreseeing the dangers facing the banks and not downgrading their debt more quickly. They have largely destroyed their own business, which depends on their assessments being trusted.

The chairmen, chief executives and the directors of the banks, whose shares have been partially nationalized, probably deserve the greatest censure. Their eyes seem to have been fixed on short-term profits and ever increasing bonuses for themselves and their top employees who exploited derivatives in which toxic assets were embedded and hidden.

There seems little doubt that the boards simply did not understand the risks that they took. Some 60 percent of the equity in RBS, which owns National Westminster Bank and which overpaid last year for ABN Amro in the Netherlands, now belongs to the government.

This bank, however, made the largest rights issue ever arranged in Britain only a few months ago. The chairman and chief executive categorically declared at that time that this would give them adequate capital to cover any foreseeable losses. The government has understandably demanded that the chief executive, who had brushed aside objections to the purchase of ABN Amro, should go. He duly resigned but has said not a word of apology for the mistakes that had led to the debacle.

The hedge funds, which should have helped to reduce the volatility in the markets, have contributed to the crisis by selling in a falling market and adding to the landslide.

Ordinary folk, who borrowed as much as they could to fund mortgages of houses for themselves but also to let, and who purchased consumer goods on credit, cannot put all the blame on others. Some at least were irresponsible and others greedy, but there was no official attempt to dissuade them from borrowing or to educate them in personal and responsible finance. House prices seemed to rise inexorably every year and young people felt that if they did not get on the housing ladder soon they would never be able to afford a dwelling of their own.

Those with savings were tempted to put their cash into institutions, such as Icelandic banks, which offered the best rates of interest. Some local governments, under pressure to make the best of the cash they held, also placed large amounts in Icelandic banks. When these banks were nationalized by the Icelandic government and deposits frozen, the British government, in order to protect British deposits, used antiterrorist legislation, which was never intended for such a purpose, to freeze Icelandic assets. This has led to a serious spat between the British and Icelandic governments.

There will have to be a tightening of the supervision and regulation of financial institutions. International agreement needs to be reached on standards and especially on the amount of equity required to cover losses and possible withdrawals. But if regulations are too tight and competition is stifled, allegedly to protect the consumer, borrowers as well as savers will be the ultimate losers.

Hugh Cortazzi, a former British career diplomat, served as ambassador to Japan from 1980 to 1984.