Today the new Financial Crisis Inquiry Commission, modeled after the New Deal-era Pecora Commission, begins its investigation into possible misconduct by the financial sector causing last year’s market meltdown. Campaign for America’s Future co-director Robert Borosage released the following statement on what the commission needs to do to fulfill its mission. Below that is a set of recommendations proposed by 40 organizations to the Commission in a letter today.
Statement from Robert L. Borosage
We are pleased that the Financial Crisis Commission is coming together, under the leadership of chair Phil Angelides. It has enormous challenge before it.
As Phil suggests in his opening statement, the Commission should aspire to be the modern day version of the Senate Banking Hearings in the 1930s that came to be named after the chief counsel, Ferdinand Pecora.
In the 1930s, Wall Street excesses, fraud, and speculation helped feed a bubble that burst and contributed to the Great Depression. FDR stepped into save the banks, reorganize them, and stave off financial panic.
But once saved from ruin, the banks rallied, seeking to fend of any serious regulation. Pecora changed that. By exposing the bankers’ misdeeds to the public, by revealing the crimes and the abuses, he helped rouse public anger, and create the conditions for the vital reforms – from the Glass Steagall Act to the SEC – that helped preserve us from financial crises for several decades.