A group of former high-ranking Citigroup executives defended the firm’s management of risk in its credit derivatives business on Wednesday, telling an investigative panel that the firm’s multibillion-dollar subprime mortgage losses arose from unprecedented global events beyond their control.

The Citi executives were the latest to testify before the Financial Crisis Inquiry Commission, which on Wednesday sought to explore the subprime mortgage crisis. A former Citi chief executive, Charles O. Prince III, and a former director, Robert E. Rubin, are scheduled to testify on Thursday.

“Citi’s losses from its C.D.O. business did not result from Citi’s fixed-income group placing high-risk bets in its proprietary trading business on esoteric, cutting-edge trades in a reach for outsized profits,” Thomas G. Maheras, a former co-chief executive of Citi’s markets and banking division, said.

“To the contrary, our primary C.D.O. losses stemmed from client-driven activities resulting in the holding by Citi of very low-interest yielding, and was understood to have been super-safe securities that unexpectedly depreciated in value after I left the company.”

Those securities were the highest-ranked assets within collateralized-debt obligations, pools of mortgages that Citi sliced into different layers and sold around the world, with the firm holding on to a large portion as well. The highest-ranked layers were rated triple-A by credit ratings agencies, but after mortgage defaults began to climb, ratings downgrades of those same securities forced Citi to take billions of dollars in write-downs.

When the financial crisis reached its peak in September 2008, Citi was forced to seek extensive government assistance to survive.

The Citi executives testified on Wednesday that the downgrading of the C.D.O.’s caught the bank by surprise. But several of the commission’s members expressed skepticism that Citi’s risk managers could have failed to foresee the plunge in housing prices that precipitated the ratings downgrades.

Bill Thomas, the commision’s vice chairman and a former Republican representative, set the tone of the questioning after the executives’ opening remarks.

“Obviously you weren’t supervised by competent people or what happened wouldn’t have happened,” Mr. Thomas said. “None of you heard the phrase ‘what goes up must come down’? You thought housing was unique?”

The Citi executives said that they relied on their financial models and the ratings agencies to assess the risk associated with the C.D.O.’s. But the bank’s reliance only on financial models to gauge that risk drew criticism from another commission member, Heather Murren.

“Citigroup has a very large and a number of extremely talented fundamental analysts, so the notion that the four of you were unable to determine the value of the underlying securities because you were relying completely on financial models is somewhat disingenuous,” Mr. Murren said.

Ms. Murren, a former equity research analyst at Merrill Lynch, also questioned Citi’s compensation structure, arguing that it was structured to encourage growth at the expense of proper risk management.

“There was a very, very significant internal focus on risk,” Mr. Maheras responded. “On the contrary, I think Citigroup had the largest risk management structure in the business.”

Ms. Murren quipped, “Um, bigger isn’t better.”

– Cyrus Sanati