Financial Crisis Inquiry Commission

The Financial Crisis Inquiry Commission (FCIC) was a ten-member commission appointed by the leaders of the United States Congress with the goal of investigating the causes of the financial crisis of 2007–2008.[1] The Commission[2] has been nicknamed the Angelides Commission after the chairman, Phil Angelides. The commission has been compared to the Pecora Commission, which investigated the causes of the Great Depression in the 1930s, and has been nicknamed the New Pecora Commission. Analogies have also been made to the 9/11 Commission, which examined the September 11 attacks. The commission had the ability to subpoena documents and witnesses for testimony, a power that the Pecora Commission had but the 9/11 Commission did not. The first public hearing of the commission was held on January 13, 2010, with the presentation of testimony from various banking officials.[3] Hearings continued during 2010 with "hundreds" of other persons in business, academia, and government testifying.[4]

The Commission reported its findings in January 2011. In briefly summarizing its main conclusions the Commission stated: "While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubble—fueled by low interest rates, easy and available credit, scant regulation, and toxic mortgages—that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world. When the bubble burst, hundreds of billions of dollars in losses in mortgages and mortgage-related securities shook markets as well as financial institutions that had significant exposures to those mortgages and had borrowed heavily against them. This happened not just in the United States but around the world. The losses were magnified by derivatives such as synthetic securities."[5][6]

The commission was explicit in its concerns about insurance giant American International Group, financial giants Bear Stearns and Lehman Brothers, and mortgage giants Fannie Mae and Freddie Mac, each of which the government brought under consideration for financial rescue.[7]

In April 2011, the United States Senate Homeland Security Permanent Subcommittee on Investigations released the Wall Street and the Financial Crisis: Anatomy of a Financial Collapse report, sometimes known as the "Levin-Coburn" report.

  1. ^ Edelberg, Wendy; Feldberg, Greg (2024). "The Financial Crisis Inquiry Commission and Economic Research". Journal of Economic Perspectives. 38 (2): 43–62. doi:10.1257/jep.38.2.43. ISSN 0895-3309.
  2. ^ Drawbaugh, Kevin; Karey Wutkowski; Steve Eder; Dan Margolies; Elinor Comlay; Joe Rauch (January 13, 2010). Tim Dobbyn (ed.). "Barons of Wall St concede failures; no apology". Reuters. Retrieved 14 January 2010.
  3. ^ "Official Transcript - First Public Hearing of the Financial Crisis Inquiry Commission" (PDF). US Financial Crisis Inquiry Commission. January 13, 2010. Archived from the original (PDF) on March 26, 2010. Retrieved April 7, 2010.
  4. ^ "Bloomberg-Dimon, Blankfein, Mack to Testify". Bloomberg.com. Archived from the original on 2012-10-26.{{cite web}}: CS1 maint: bot: original URL status unknown (link)
  5. ^ Financial Crisis Inquiry Commission-Press Release-January 27, 2011 Archived January 30, 2011, at the Wayback Machine
  6. ^ "FCIC Report-Conclusions Excerpt" (PDF). Archived from the original (PDF) on 2011-03-04.
  7. ^ Phil Angelides (2011). Financial Crisis Inquiry Report. DIANE Publishing. p. xv. ISBN 9781437980721.