CCH Financial Reform News Center

Committee on Oversight and Government Reform Republicans Question FCIC Spending

This story appeared in Bank Digest.

Ahead of the July 27, 2010, House vote to pass H.R. 4899, the War Supplement Appropriations Act, Committee on Oversight and Government Reform Republicans questioned the increase in funding for the Financial Crisis Inquiry Commission (FCIC) contained within the bill. The controversial provision will boost FCIC funding by 22 percent, or $1.8 million. In light of this additional funding provision that came at the request of the FCIC, Ranking Member Darrell Issa, R-Calif., sent a letter to FCIC Chairman Phil Angelides requesting “information that will help the public understand whether any additional expenditure of taxpayer money on the FCIC is warranted.” Republican criticism of the additional funds focused on the makeup of the members and staff of the FCIC. Republicans questioned whether current members have conflicts of interest arising from their prior roles in the public and private sectors, and, while acknowledging the need to hire additional members with expertise in financial markets, Republicans noted their concern that the FCIC has used up its original $8 million budget when many of its staffers come from, and are paid by, other government agencies.

FCIC Staff Reports Issued as Part of Derivatives Hearing

This story appeared in Bank Digest.

As part of the two days of hearing be held by the Financial Crisis Inquiry Commission regarding the role derivatives played in the financial crisis, the FCIC’s staff released two reports— Preliminary Staff Report -- Overview on Derivatives and Preliminary Staff Report on Credit Derivatives and Mortgage-Related Derivatives.

Financial Crisis Inquiry Commission Public Hearing on Derivatives Scheduled

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has announced that its next public hearing--"The Role of Derivatives in the Financial Crisis."--will be held June 30, 2010, through July 1, 2010. The hearing sessions will include, but are not limited to, witnesses from the following entities: American International Group, Inc.; Goldman Sachs Group, Inc.; the Commodity Futures Trading Commission; the Office of Thrift Supervision; and the New York State Insurance Department.

Financial Crisis Inquiry Commission Releases Key Credit Rating Agency Information

This story appeared in Bank Digest.

A report providing background factual information to the staff of the Financial Crisis Inquiry Commission was released prior to the FCIC’s public hearing on June 2, 2010. The report provides information on credit ratings and presents background on the role that credit rating agencies may have played in the financial crisis. Most subprime and Alt-A mortgages were held in residential mortgage-backed securities, most of which were rated investment grade by one or more credit rating agencies. Furthermore, collateralized debt obligations, many of which held residential mortgage-backed securities, were also rated by the credit rating agencies. Between 2000 and 2007, Moody's rated $4.7 trillion in residential mortgage-backed securities and $736 billion in collateralized debt obligations. The sharp rise in mortgage defaults that began in 2006 ultimately led to the mass downgrading of residential mortgage-backed securities and collateralized debt obligations, many of which suffered principal impairments. Losses to investors and writedowns on these securities played a key role in the resulting financial crisis, according to the report. Comments on the report must be received by July 14, 2010.

The Financial Crisis Inquiry Commission Releases Ethics Guidelines

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has released its adopted ethics policies. One set of guidelines applies to commissioners and another set applies to commission staff.

Financial Crisis Inquiry Commission Details Next Public Hearing

This story appeared in Bank Digest.

The FCIC has announced its witness list and more details for the its June 2, 2010, public hearing entitled “Credibility of Credit Ratings, the Investment Decisions Made Based on those Ratings, and the Financial Crisis.”

FCIC Hearing to Examine Credit Ratings

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has announced details for its next public hearing titled: “Credibility of Credit  Ratings, the Investment Decisions Made Based on those Ratings, and the Financial Crisis.” The hearing is scheduled for Wednesday, June 2, 2010, at The New School in New York City.

FCIC Issues Preliminary Staff Report on the “Shadow Banking” System

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has released a staff report on bank-like financial activities that are conducted outside the traditional commercial banking system, known as “shadow banking.” The preliminary report comes in advance of public hearings on the shadow banking system to be conducted by the FCIC on May 5 and 6, 2010. The staff report defines shadow banking, reviews its role in the financial crisis, describes the composition, characteristics and evolution of the shadow banking system and discusses the vulnerabilities of shadow banking markets revealed during the financial crisis.

Financial Crisis Inquiry Commission Announces Details for Next Public Hearing

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has provided details for its public hearing titled “The Shadow Banking System” to be held May 5 and 6, 2010, in Washington, D.C..

Moody's Corporation Issued Subpoena

This story appeared in Bank Digest.

The Financial Crisis Inquiry Commission has announced the issuance of a subpoena to Moody's Corporation for allegedly failing to comply with a request for documents in a timely manner. In seeking documents and testimony from public agencies and companies, the Commission has made it clear that it is committed to using its subpoena power if there is a lack of, or delay in, compliance.