Crisis panel vows: We will be relevant
Congressionally-appointed panel convenes to discover causes of financial crisis. It is determined to be helpful, even as lawmakers move ahead without them.
WASHINGTON (CNNMoney.com) -- Capping a week that highlighted the one-year anniversary of the financial collapse, a panel aimed at getting to the bottom of its cause is just now getting on its feet.
The Financial Crisis Inquiry Commission's members want to "shed light" on why the collapse happened and make recommendations to avoid future crises. Their final report is 15 months away, but congressional leaders are already pushing ahead on bills to revamp financial rules to avoid the next crisis.
The congressionally appointed group, funded with $8 million, met for the first time publicly on Thursday and pledged that its work will serve as more than window dressing for politicians worried about the appearance that they allowed the financial crisis to happen.
"There's no question that this commission had a political birth," said the committee's second-in-command, Bill Thomas, a retired Republican congressman from California who ran the powerful Ways and Means Committee. "You can sulk about your birth or get on with your life. And frankly, this commission's life is very, very important."
The commission plans to release interim reports as it gathers information, said the group's chairman, Phil Angelides, a former California state treasurer who warned about financial sector abuses back in 2002 and lost a 2006 gubernatorial bid. It also plans to stay in close contact with Capitol Hill committees leading the reform of the financial system.
The group has subpoena power over records and can demand interviews with key decision-makers to figure out what caused the crisis.
One model for the panel is the Pecora Commission, which examined the 1929 Wall Street crash and other events that caused the Great Depression. That group came up with recommendations that helped redefine the financial system.
The group is most often compared with the Sept. 11 commission, which found that the government had ignored warning signs of terrorist threats.
But unlike the 9-11 commission, which was made up of equal numbers of Democrats and Republicans, the financial crisis commission has six Democrats and four Republicans.
Such differences in opinion came out in opening statements, as panel members highlighted the issues they want to focus on.
Several Republican appointees, including former White House official Keith Hennessey, talked about the need to examine the housing crisis and "politically popular laws passed by Congress that exacerbated" the problems.
Hennessey, an economic adviser under President George W. Bush, wants to delve into the "relaxation of lending standards" and people buying homes they could not afford. Republican lawmakers often talk about such homeownership policies as a major cause of the financial crisis.
By contrast, former Sen. Bob Graham, a Florida Democrat, said the commission needs to explore how consumer protections went awry because that's high on the congressional agenda.
Brooksley Born, former chairman of the Commodities Futures Trading Commission, called for stronger regulation of complex financial products like derivatives, which she warned about in the 1990s.
"The erroneous belief in the effectiveness of self-regulation has played a major role in bringing our economy to its knees and has cost the taxpayers trillions of dollars," Born said.