* Three reports on financial crisis to be released Thurs
* Dems focus on Wall Street greed, lack of regulation
* One Republican blames big government's housing policy
* Three other Republicans to issue their own report
(Adds Seiberg comment, background)
By Kevin Drawbaugh and Dave Clarke
WASHINGTON, Jan 24 Three competing, politically
charged tales of the financial crisis will emerge this week
when a U.S. congressional panel finally concludes its 20-month
The Financial Crisis Inquiry Commission has failed to
produce a consensus explanation of the 2007-2009 banking
debacle, as it was asked to do in May 2009.
Instead, the 10-member panel has fractured along the same
ideological fault lines that divide much of political
Washington. Three reports will be issued by commission members
on Thursday, each conforming with a familiar political slant.
The divisiveness that split the commission is also in
evidence in the rollout of financial reforms that followed the
crisis. The setting of position limits for commodity markets
has been delayed, for instance, and Republicans are threatening
to withhold funding for agencies implementing the reforms.
The crisis panel's six Democrats, including Chairman Phil
Angelides, will offer a report focused on the greed and power
of Wall Street, a lack of effective regulation and the "shadow
banking" system, said people familiar with the document.
Derivatives markets will come in for sharp criticism from
the Democrats, along with a 1999 law that allowed bank holding
companies to move into other financial businesses, and the
immense influence of Wall Street on government.
One person, who asked not to be identified, compared the
Angelides report to the "vampire squid" view of bankers preying
on the public, captured by journalist Matt Taibbi's description
of Goldman Sachs Group Inc (GS.N) as "a great vampire squid
wrapped around the face of humanity, relentlessly jamming its
blood funnel into anything that smells like money."
Republican commission member Peter Wallison will offer his
own dissenting report that largely blames the crisis on the
housing policy of "big government." This well-worn GOP view is
shared by conservative foes of Fannie Mae FNMA.OB and Freddie
Mac FMCC.OB, the troubled giants of mortgage finance.
Three other Republican commission members will offer a
separate account of the crisis. People familiar with it said it
will downplay the banks' culpability and clout and stress a
confluence of global trends in tracing the origins of the
devastating crisis that peaked in late 2008.
"It is what it is," Douglas Holtz-Eakin, a Republican
commission member said of the lack of a single narrative coming
out of the commission's work.
"We know where Peter Wallison is, and in my view the
majority went too far to the left for me to sign on. So we
ended up in the middle," Holtz-Eakin told Reuters regarding the
report he will issue with former GOP Representative Bill Thomas
and former Bush White House economic adviser Keith Hennessey.
That dissent, like Wallison's, will be attached to the main
report being released by Angelides and the Democrats.
The commission is also expected to disclose texts of
interviews and documents it obtained in its investigation.
"We are less interested in the official report, given the
partisan divide, but believe the source documents create
significant headline risk for the big banks, the housing
enterprises and the regulators. The issue is how much will be
released and when will it be released," said MF Global research
analyst Jaret Seiberg.
A year ago, the commission hauled some of banking's
heaviest hitters into public hearings for questioning. Goldman
Sachs Group Inc (GS.N) Chief Executive Lloyd Blankfein,
JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon and former
Citigroup (C.N) executives testified to the panel.
Angelides noted pointedly as the commission got going in
mid-2009 that it would have the power to refer cases for
criminal prosecution, but that now seems unlikely to occur.
One Wall Street investor, focused on the still-unfolding
Basel III global bank capital accord, said the congressionally
appointed commission's potential findings were "already in the
"What else is it going to tell us? That we were light on
capital and light on reserves? We know that, and that's already
going up on Basel III," the investor said.
(Reporting by Kevin Drawbaugh and Dave Clarke; Additional
reporting by Maria Aspan in New York; editing by Gerald E.
McCormick and Tim Dobbyn)