U.S. law chief wants financial fraud task force

WASHINGTON (Reuters) - U.S. Attorney General Eric Holder said on Thursday he was considering forming a financial fraud task force and advocated a "more comprehensive" view of the causes behind the U.S. economic crisis.

"We are going to be talking about very soon a financial fraud task force," he told a congressional hearing. "I think there needs to be a more comprehensive view."

Holder said both state and local authorities should be involved in future financial fraud probes, which would go beyond examining specific factors such as mortgage fraud.

The worst U.S. economic crisis in decades has spurred a number of calls for investigations and commissions.

The U.S. Senate on Wednesday voted to form an independent panel to probe the causes of the downturn -- a first step toward eventual legislation that could be signed by President Barack Obama.

The 10-member, bipartisan Financial Markets Commission would be modeled after the 9-11 Commission, which investigated failures leading up to the September 11, 2001, attacks on the United States and made recommendations on how to avoid another such assault.

The Senate is looking to extend federal fraud laws to mortgage lending businesses, which the U.S. government does not now regulate or insure.

One bill before the chamber would give the Justice Department $165 million a year for 2010 and 2011 to hire investigators and prosecutors to fight fraud.

The bill would also give extra funds to the Securities and Exchange Commission, the U.S. Postal Inspection Service and other agencies to fight fraud.

(Writing by Tabassum Zakaria; Editing by Anthony Boadle)