WASHINGTON (Reuters) - Republican lawmakers on Wednesday criticized the commission that investigated the 2007-2009 financial crisis for not producing a report that all of its members could endorse.
The Financial Crisis Inquiry Commission was set up by Congress in May 2009 and it issued its final report on January 27. The hope was that its work would rip the lid off the crisis in the comprehensive way that the Pecora Commission did in the 1930s during the Great Depression.
The deeply divided 10-member panel’s final report was endorsed only by its six Democratically appointed members.
It concluded that the crisis was avoidable and criticized the culture of deregulation championed by former Federal Reserve Chairman Alan Greenspan, but did not offer any fresh revelations about the cause of the crisis.
Three Republican members produced a second analysis of the crisis while the fourth Republican member produced his own.
Republican members of the House of Representatives’ Financial Services Committee at a hearing chastised the panel for not producing a single conclusion, aiming most of their criticism at the commission’s Democratic majority.
They argued that the lack of a single voice from the panel devalued the job assigned to it by Congress.
“The FCIC has fallen well short of unity,” said Republican Representative Patrick McHenry. “In fact it was no Pecora.”
Phil Angelides, the chairman of the commission, defended its work, arguing there was more agreement than the three separate reports suggest and that the final product provides a fact-based narrative that will be helpful to lawmakers and researchers for years to come.
The report comes after last year’s passage of the Dodd-Frank financial reform law, further blunting its impact.
The panel’s Democratic members said in their testimony the new law was at least a good start to dealing with the financial crisis while Republican members were less charitable.
“The hundreds of new rules that must be promulgated in Dodd-Frank are a lingering uncertainty that cannot be anything but a drag on the financial sector,” Douglas Holtz-Eakin, a Republican panel member and a former director of the Congressional Budget Office, said in prepared testimony.
The three Republicans, including Holtz-Eakin, offered an alternative view in their report last month that laid out 10 causes to the crisis.
They cited a credit bubble, a lack of capital and failures by credit rating agencies as some of the causes, and put more of an emphasis on the role of “broad economic forces” than the majority report.
The three Republicans argued both the majority report and a second dissent written by Republican Peter Wallison, which faulted government housing policies, provided too simplistic a narrative.
Reporting by Dave Clarke, Editing by Dave Zimmerman