Financial crisis commission opens second round of hearings on meltdown

Photo of Aleksandra Kulczuga
Aleksandra Kulczuga

While the Senate Banking Committee may be close to proposing a financial regulatory reform bill, elsewhere in Washington the investigation continues into what caused the meltdown in the first place.

The 9/11 commission for the financial crisis launches their second set of public hearings this afternoon, a month after hauling top Wall Street executives to the Capitol for questioning. The hearings today include a number of experts on the financial crisis presenting working papers on the causes that led to the meltdown that began in 2008.

“The forum is a continuation of the commission’s efforts to hear from academic experts and economists on issues related to the crisis and to look at the forces that brought our financial system to the brink of collapse,” says Tucker Warren, the Financial Crisis Inquiry Commission’s (FCIC) spokesman.

Today the commission will hear from economics professors at Yale, Dartmouth, University of California at Berkley and the University of Chicago on topics such as the macroeconomic effects of monetary policy, U.S. debt and the growing interconectedness of financial institutions. Commission members will also listen to testimony on whether Americans are sufficiently sophisticated to make decisions in today’s complex financial environment.

Tomorrow the commission will delve into the details of mortgage lending practices, the role of Fannie and Freddie, and will also explore the world of “shadow banking” — a term usedly to loosely define the ways banks and financial instiutions lend to each other outside the world of traditional, regulated consumer banking.

The commission, chaired by Democrat Phil Angelides, former California State treasurer and Republican Vice Chair Bill Thomas, former Republican chairman of the House Ways and Means Committee, has been conducting closed-door inteviews during the last month with top finance leaders in the public and private sectors.

The commissioners have a wide-ranging jurisdiction, which includes subpoena power, and a year to complete their investigation and provide a report to Congress in December.

Treasury Secretary Tim Geithner met with leaders of the Senate Banking committee on Wednesday to discuss financial regulatory reform, and Geithner stressed that the administration will push hard for a reform bill this year, most likely before the commmision’s report is due in December.

While the FCIC is not tasked with offering regulatory reform proposals, it has open lines of communication with the lawmakers. “We’ve been in regular touch with people on the Hill — both about what we’re finding and what they’re doing. They’ll call us when they have questions or interests that they think we can help with,” Warren said.

Contact Aleksandra at: ak[at]dailycaller[dot]com.

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  • sandra3dee

    “Commission members will also listen to testimony on whether Americans are sufficiently sophisticated to make decisions in today’s complex financial environment.” Duh, isn’t that why we elect representatives? Maybe they should listen to testimony on whether our congressmen/women are sufficiently sophisticated to make decisions.

  • sanjay

    may be these rascal professors need to spend some time in real world running real businesses and prove themselves.

    These so called brilliant economists should be required by law to prove themselves in the real world before they open their stinking mouths.

  • thephranc

    How much are they wasting on this? I can find at least one instant way to cut some spending.

  • thebigodoopedu2

    The Henny Penny’s of Washington..If they get done squawking they need actually do something about the current crisis.

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