rssFinancial Crisis Inquiry Commission Continues Hearings
Thursday, April 08, 2010 at 8:40 am
- 17 Comments
In some sense, the Financial Crisis Inquiry Commission is a lame duck. Headed by Phil Angelides and created in May 2009, the FCIC is not due to file its final report until December. Financial reform legislation will likely come up for a vote next month. The panel’s ultimate recommendations will come months too late to make it into the bill — the final details of which are currently being hammered out by Sen. Chris Dodd (D-Conn.) and others. Where the FCIC is most important is in its testimonies, dragging Wall Street titans and former Fed and Treasury officials to the podium and grilling them.
Yesterday, it heard from former Fed Chair Alan Greenspan. Today, the FCIC hears from former top Citi executives Chuck Prince and Robert Rubin, as well as the current and former comptrollers of the currency (responsible for regulating national banks); tomorrow, it hears from former Fannie Mae officials and Office of Federal Housing Enterprise Oversight executives.
What did Greenspan say of importance? Not much. (Here is a copy of his prepared remarks and a copy of his review of the boom and bust, titled “The Crisis,” prepared for the Brookings Institution and released last month.) Much of his testimony retread well-worn ground. But the “Maestro” did assert that he was correct 70 percent of the time during his Fed tenure. Angelides cannily asked him: “Would you put [the financial crisis] in the 30 percent category?” Greenspan replied, “I don’t know.”
He also said that banks had been undercapitalized for the past 40 to 50 years (a problem under the Fed’s purview) and argued that financial services might be too complicated for regulators to regulate. “It’s not a simple issue of, ‘Let’s regulate better. It’s a different world,” he said. “The complexity is awesome.” He hedged that statement by noting that banks’ counterparties — the firms on the other sides of their trades and loans — helped alert regulators.
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17 Comments
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Comment posted April 8, 2010 @ 8:44 pm
Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.
Here is an example of what I am talking about:
Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)
Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
“Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM.”
The Center for Responsible Lending says YSP “steals equity from struggling families.”
1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.
http://merkley.senate.gov/newsroom/press/releas…
Pingback posted April 8, 2010 @ 10:10 pm
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Comment posted April 9, 2010 @ 12:05 am
Is the Financial Crisis Inquiry Commission the modern day equivalent of the old House Committee on Un-American Activities?
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Comment posted April 10, 2010 @ 8:17 pm
Well this is a concept, so no one should expect all the details to be there. And only 1st year work?
Awesome.
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