US Financial Crisis Inquiry Commission

The public phase of this commission’s hearings are about to begin:  this week’s Economist provides a useful report on the work of the Commission. You can read this article here.

15 thoughts on “US Financial Crisis Inquiry Commission”

  1. anger may not be a policy but it can it seems catalyze some…Oh for a dose of leadership in this benighted isle.

  2. @Brian Lucey
    Brian Cowen is not in the way of an inquiry – the entire government is, as are now all government TDs. As Vincent Browne said, they have known since the start of 2007 that there was trouble in the banks. So three years after the banks got into crisis they are still waffling on about waiting for the right time. The right time is as near as possible to the next election.

    http://www.irishtimes.com/newspaper/opinion/2009/1230/1224261408353.html

    “The Department of Finance and Brian Cowen personally must have had prior notice, from at least the beginning of 2007, that the banks were in crisis, especially Anglo Irish. Michael Somers, then head of the National Treasury Management Agency (NTMA) said he knew Anglo was in trouble from then and it isn’t believable he didn’t tell anybody.”

  3. @Brian Lucey
    A lot of the time in Ireland everyone knows the truth but no one says it. I don’t move in financial circles so I have to go on the newspapers (see above). But I would expect that the truth as expressed in policy/government/financial circles is not being printed in newspapers and is only emerging drip by drip in a disorganised way. As of now, what is the agreed but unpublished consensus on:
    When our banks got into trouble?
    When the government – including the NTMA etc etc – suspected our banks were in trouble?
    When they knew our banks were in trouble?

  4. @ALL
    These questions are also open to anyone else – no spinners need apply.

    As of now, what is the agreed but unpublished consensus on:
    When our banks got into trouble?
    When the government – including the NTMA etc etc – suspected our banks were in trouble?
    When they knew our banks were in trouble?

  5. The Americans have moved fairly quickly:
    “Phil Angelides, the former California treasurer who is the inquiry’s chairman…has been busy deploying a tough investigative staff and will not allow the proceedings to devolve into a typical blue-ribbon Beltway exercise in toothless bloviation.

    He wants to examine the financial sector’s “greed, stupidity, hubris and outright corruption” — from traders on the ground to the board room. “It’s important that we deliver new information,” he said. “We can’t just rehash what we’ve known to date”-
    http://www.nytimes.com/2010/01/10/opinion/10rich.html

    http://www.fcic.gov/openmeeting.pdf

  6. http://www.thepost.ie/news/councils-criticised-by-court-over-waste-report-46693.html

    Now why would they interfere in a report by experts? To get the desired result and meet their bonus level target. Is the bonus a secret one? Who is paying it? Why are these people still in their jobs?

    Should we not have a corruption investigations pending post?

    I hope the US whitewash commission refers to the role of Spitzer in NY trying to implivcate GWB in the subprime crisis!

  7. Inquiries used to be so different in the good old days.

    Heres a quote from Peter Spufford’s book ‘The Merchant in Mediaval Europe’

    “Bank accounts were quite clearly part of the money supply by the end of the ‘long thirteenth century’ and legislation was introduced to protect those who used them. In Venice a guarantee of 3,000 lire was required in 1270 before a moneychanger banker was allowed to set up in business. In Barcelona, from 1300, book entries by credit transfer legally ranked equally with original deposits among the liabilities of bankers. Those who failed were forbidden ever to keep a bank again, and were to be detained on bread and water until all their account holders were satisfied in full. In 1321 the legislation there was greatly increased in severity. Bankers who failed and did not settle up in full within a year were to be beheaded and their property sold for the satisfaction of their account holders. This was actually enforced. Francesch Castello was beheaded in front of his bank in 1360.”

    Apparently, the authorities responded to increasingly frequent failures of these banks by establishing public banks……

    Ho hum.

  8. @academic economists
    I have seen little coverage of these questions in the news media:

    When our banks got into trouble?
    When the government – including the NTMA etc etc – suspected our banks were in trouble?
    When they knew for definite our banks were in trouble?
    What was the rationale for the blanket bank guarantee?

  9. @academic economists
    As a member of the public I’d really like to get opinions from academic economists on these questions. Of course the information in the public domain has been and is being deliberately restricted by the government. I would point out though that the blanket bank guarantee was presented in the media at the time, and for long afterwards, as a tremendous success. Since then it’s been all downhill. The general public still have absolutely no idea what the answers are. I think they are at least entitled to the best guesses of those who blog on this site, as I can see by blog posts such as this that some of you are highly sceptical of the official “version”.
    http://www.irisheconomy.ie/index.php/2009/09/29/happy-birthday-to-the-guarantee/
    As far as I know only Morgan Kelly has given an opinion on the
    reasons. I would really like to see other opinions. The more the better.

  10. Phil Angelides, the former California treasurer who is the inquiry’s chairman, told me in interviews late last year that he has been busy deploying a tough investigative staff and will not allow the proceedings to devolve into a typical blue-ribbon Beltway exercise in toothless bloviation.

    He wants to examine the financial sector’s “greed, stupidity, hubris and outright corruption” —Frank Rich, NYT
    http://www.nytimes.com/2010/01/10/opinion/10rich.html

  11. Failed by Fianna
    .
    The Irish government rejected fiscal stimulus and slashed public spending instead. The result is economic meltdown.
    http://www.newstatesman.com/economy/2010/01/ireland-irish-social-dublin
    .
    As Ireland has surpassed the worst expectations of its grandest begrudgers. Begrudgery, for those unfamiliar with terms such as “the hurler on the ditch”, has long acted as the Irish brake on irrational exuberance. It is the local voice at the back of the choir which warns that this party will have consequences and all the bright things will turn to dust.
    .
    A cash nexus has been forged, with Fianna Fáil facilitating the developers who hog the land and sell it to the builders for vastly overpriced houses, financed by bankers who operate with minimal oversight, and then collude to hide the “political donations” made to Fianna Fáil by the developers and builders. The latest addition to the nexus is the taxpayer, who is picking up the tab for someone else’s binge.
    http://www.newstatesman.com/economy/2010/01/celtic-tiger-ireland-serious

  12. This should yield interesting testimony and good source material for commentators. However, it is not clear that it will yield any insight into the various root causes of the problem.

    Furthermore, the question as to whether western capitalism was not fit for purpose, was thwarted or is working fine will not be addressed.

    On an aside, I also think the idea that “excess” global savings could cause the fiscal is somewhat laughable. Talk about not taking responsibility for your actions!!

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