All You Need to Know About the Financial Crisis Inquiry Commission
In July, 2009, the Roosevelt Institute launched a transformative initiative to answer the question: what caused the crisis? Like you, we want to know how our financial system imploded and determine how we can avoid future chaos. To that end, we assembled thought leaders, former government officials, historians and intellectuals to write an open letter to the Financial Crisis Inquiry Commission, appointed by Congress to "examine all causes, domestic and global, of the current financial and economic crisis." The letter requested the adoption of guidelines critical to the success of the investigation. Signers include Nobel Prize laureate Joe Stiglitz, former Secretary of Labor Robert Reich, and Rob Johnson, Director of Financial Reform at the Roosevelt Institute. Hundreds of concerned citizens have added their signatures to this letter, stating a strong desire for a commission with teeth and an honest, substantive investigation. Add your voice by signing online at www.whatcausedthecrisis.com.
New Deal 2.0 is committed to an ongoing, rigorous discussion about the Commission and its predecessor, the Pecora Commission of the 1930s that led to sweeping reforms that protected the public from financial abuses. ND20 will be covering the Commission's public hearings beginning Wednesday, January 13. Stay tuned for live coverage, in-depth analysis, and powerful commentary.
Want to learn more? Visit Huffington Post's "New Pecora Commission," Big News Page (http://www.huffingtonpost.com/news/pecora-commission), created in partnership with the Roosevelt Institute and New Deal 2.0 for breaking news.
Social Security remains one of the greatest achievements of the Democratic Party since its creation 75 years ago. Although Republicans have historically fulminated against the program (Ronald Reagan once likened it as something akin to “socialism”), they have actually made little headway in touching this sacred “third rail” in American politics. President Bush pushed for partial privatization of the program in 2005, but the proposal gained no policy traction (even within his own party) because Social Security continues to be hugely popular with American voters. It’s a universal program that benefits all Americans, not a government handout to a…
The FCIC is ready to tackle the financial weapons of mass destruction.
The Financial Crisis Inquiry Commission today announced that it will hold its next hearing, “The Role of Derivatives in the Financial Crisis,” on June 30th and July 1st, this time to investigate derivatives. Warren Buffett himself has warned of the danger of these products, as they tap into the human tendency to gamble with more money than we should. Will the FCIC help uncover the mistakes made and crack down on their use? Tune in to find out!
Before the hearing, read up on New Deal 2.0’s coverage of derivatives reform:
Bloomberg TV caught up with ND20 contributor Josh Rosner at yesterday’s FCIC hearing on ratings agencies. His take: If Washington really wants to “dive deep” into the causes of the financial crisis, including the role these agencies played, Rosner “cannot imagine that there would not be criminal charges.” The real issue for him is not whether there is a conflict of interest inherent in Moody’s business model, but the compensation structure that “creates a misalignment of interests” by not keeping the agencies tied to the products they rate for the long-haul. Watch here:
What does “I Love Lucy” have to do with the financial meltdown? You’d have to be at the FCIC circus today to know.
The FCIC dug its teeth into the mess of ratings agencies today. Lame excuses and mixed metaphors abounded. The first panel was a mix of Moody’s former employees who told stories of a free-wheeling culture that couldn’t say ‘no’ to a deal and Moody’s management who sought to tamp that image down. The second panel almost lost the Oracle of Omaha, who tried to submit written testimony rather than show up, but in the end was subpoenaed.
The Financial Crisis Inquiry Commissionannounced today its next hearing, titled, “Credibility of Credit Ratings, the Investment Decisions Made Based on those Ratings, and the Financial Crisis.” The ratings agencies had quite the part to play in the financial meltdown, by branding risky mortgage-backed securities AAA, which instilled confidence in investors. They also take their fees from the very companies they are meant to rate — quite the conflict of interest. But they have so far escaped a lot of scrutiny. Will the FCIC show some teeth as it goes after them?
The next round of hearings begins today. Tune in online.
Today, the Financial Crisis Inquiry Commission will begin hearings on shadow banks–what PIMCO’s Paul McCulley refers to as “the whole alphabet soup of levered up non-bank investment conduits, vehicles, and structures.” The hearings run through tomorrow. Watch here.
To get a handle on how shadow banking relates to the economic meltdown and financial reform, see Roosevelt Fellow Mike Konczal’s recent posts:
FCIC hearings continued yesterday, this time with former Citigroup execs and–what’s that?–a call for substantive financial reform?
The second scheduled round of FCIC hearings fired up yesterday, with former Citigroup leaders Robert Rubin and Charles Prince facing the questions. Prince, former CEO of Citigroup and Rubin, former US Treasury Secretary and Citigroup board member, tried to explain how the company violated standards to ignore risk and essentially imploded, requiring $45 billion in federal bailout funds.
The hearings were a little more promising than Wednesday’s song and dance from Alan Greenspan, which amounted to nothing more than an exercise in revisionist history. Prince even started the day off with an apology:
Alan Greenspan claims his insistence on lower interest rates had nothing to do with the financial crisis, but Roosevelt Institute Senior Fellow Jeff Madrick doesn’t buy it.
Alan Greenspan has defended himself before the Financial Crisis Inquiry Commission today. The Commission is meant to investigate the root causes of the financial crisis, and Greenspan’s work at the Fed–particularly when it comes to perpetuating low interest rates–is at the heart of the controversy. Greenspan has, of course, admitted no personal fault in creating the financial crisis, choosing instead to cite the fall of communism and excessive saving in developing countries as catalysts.
The men who stoked the financial meltdown will testify before the Financial Crisis Inquiry Commission. Don’t expect any mea culpas.
This week, Robert Rubin, Chuck Prince and Alan Greenspan will testify before the Financial Crisis Inquiry Commission. We know that they will duck blame and likely slip past the courteous questions of their inquisitors.
But let us hope the commission keeps firmly in mind that all three were at the passionate greedy heart of the crisis. As head of Bill Clinton’s Economic Security team and soon after Treasury Secretary, Rubin presided over an administration hell-bent on financial deregulation. The New Deal…
The Financial Crisis Inquiry Commission has announced details for its next public hearing, which will take place from April 7th to April 9th in Washington, D.C. The Roosevelt Institute has been closely monitoring the Commission’s work, and we encourage anyone who is interested in regulatory reform and the financial crisis to watch the live broadcast of the proceedings that will be available on FCIC.gov. The announced schedule is as follows:
When:
Wednesday, April 7, 2010, 9am EDT
Thursday, April 8, 2010, 9am EDT
Friday, April 9, 2010, 9am EDT
Where: Rayburn House Office Building, Room 2123, Washington, DC
What is the Glass-Steagall Act of 1933?
The Glass-Steagall Act was introduced during the Great Depression by former Treasury Secretary Sen. Carter Glass (D-VA) and Chairman of the House Banking and Currency Committee Rep. Henry B. Steagall (D-AL).
