Charles Prince and Robert Rubin, often blamed for bringing down Citigroup , expressed deep regrets for Wall Street's meltdown in 2008 but did not take responsibility for the firm's massive losses and the eventual taxpayer bailout at a hearing on Thursday.

I can only say that I am deeply sorry that our management -- starting with me -- was not more prescient and that we did not foresee that lay before us, Prince, Citi's former chief executive, told a U.S. Congressional panel probing the causes of the financial crisis.

Bad bets on repackaged debt securities, consumer loans and other assets forced Citigroup to take three separate government rescue packages totaling $45 billion, more than any other major bank received. When the dust settled, taxpayers held about a third of Citigroup's common stock and $27 billion of its debt.

Rubin, a former Citi adviser, and former U.S. Treasury Secretary, told the Financial Crisis Inquiry Commission, that he had deep regrets for not recognizing the potential for a massive financial crisis.

But both Prince and Rubin said everyone involved in the financial system, including regulators and credit rating agencies, bore responsibility for the banking crisis that wracked the U.S. and world financial markets from 2007 to 2009.

Almost all of us...missed the powerful combination of forces at work and the serious possibility of a massive crisis, said Rubin, a former Treasury secretary in the Clinton administration. Rubin, who is also a former Goldman Sachs executive, was on Citi's board and advised the firm beginning in 1999, but reiterated on Thursday that he was an adviser to the bank and not a decision maker.

Prince said the financial crisis resulted from a confluence of factors, including the unusually long period of low interest rates and demand for securitized assets.

Citi eventually shouldered billions of dollars in losses from its exposure to bad mortgages which banks had bundled together into mortgage bonds and collateralized debt obligations, or CDOs.

Regrettably, we were not able to prevent the losses that occurred, but it was not a result of management or board inattention or a lack of proper reporting information, Prince said.

Rubin said financial regulation reform was now imperative to constrain leverage, protect consumers and ensure that no financial firm is too big to fail.

Rubin also said derivatives needed to be regulated, although in the late 1990s Rubin and others resisted attempts by former Commodity Futures Trading Commission chair Brooksley Born to bring some oversight to over-the-counter derivatives.

The Obama administration and many lawmakers now want to shed light on the $450 trillion private swaps market and are trying to pass legislation that would overhaul how the financial system is supervised. Protecting consumers and creating a mechanism to unwind large troubled financial firms are key parts of the legislation that is currently stuck in the Senate.

(Reporting by Elinor Comlay and Rachelle Younglai; Editing by Andrea Ricci)