Who should head the U.S. probe of the financial meltdown?

The list of possible candidates to chair a federal investigation of the financial-system debacle now includes retired Supreme Court Justice Sandra Day O’Connor, former Federal Reserve Chairman Paul Volcker and former Securities and Exchange Commission Chairman Arthur Levitt, Bloomberg News reports, citing unnamed sources.

Congress wants to name a panel modeled on the one that investigated the cause of the early-1930s market crash that fed the Great Depression. That probe, spearheaded by Senate counsel Ferdinand Pecora in 1933, led to major financial reforms including the creation of the Securities and Exchange Commission. Along the way it also made for great theater as Pecora called in the leading bankers of the era, including Charles E. Mitchell and Albert H. Wiggin, to testify about their roles in the meltdown.

The House and Senate have passed separate bills to create a commission, but still have to reconcile their differences before sending the legislation to President Obama.

From Bloomberg:

Discussions over who will lead the panel, as well as the group’s other members, continue and no decisions have been made, people familiar with the matter said.

The commission is likely to have the power to subpoena witnesses and spend more than a year delving into the issue.

My vote would go to the 81-year-old Volcker, assuming he would be willing to give up his current gig as chairman of Obama’s Economic Recovery Advisory Board and take on something potentially historic in scope and impact.

But in a recent interview on Bloomberg TV, Volcker said his role as an Obama advisor "is as temporary as it can be. I'm conscious of the fact that I’m not leaving enough time for fishing in my old age."

O'Connor is 79; Levitt is 78.

-- Tom Petruno

Comments

[ex-trader]

Nobody from the SEC, or the Fed, or with any Wall St ties would be an excellent place to start the search...

[RS Love]

On my own short list of who might best lead the investigation, I would take a more aggressive position and suggest Joseph Stiglitz, Frank Partnoy, Elizabeth Warren, Simon Johnson and Andrew Cuomo. If they're not going to look at GLB and CFMA 2000, then the exercise is a public relations stunt at best.

[Greg]

Let's have a true and independent commission is one is to be had. (I don't want one really.) There are many more financial institutions and organizations that have been hurt by the decisions of few. If just DC bigshots are on the commission, the impact upon community banks and credit unions will be ignored just as has been by the federal government over the last year.

[Gimme A BREAK!]

sadly, it's ALL A WHITEWASH - is anyone gong to persecute Clintons, Barney Frank, Chris Dodd et al for being ON THE TAKE FROM Wall Street? Anyone from Citi, Merrill, Goldman, gonna get strung up for corruption and RICO? Bush and Cheney going to be flogged in public for being sociopaths and deluded Neo-constipated buffoons? "No!" to ALL...so PLEASE, WHAT IS THE POINT? This IS our Great Democracy, which seems too much like National Socialists (Nazi Party) Communism under a 'benevolent' Stalin......GIMME A BREAK!!!!!! The electorate is too caught up in pretending to be Party 'members.'

[Clearly a fan]

Elizabeth Warren, Elizabeth Warren and Elizabeth Warren.

[Miki]

Alan Greenspan would be a great choice to head up an investigation. Everyone knows he did not foster and promote this economic mess. He said so himself. :)

[Art Berkowitz, CPA]

Please. Don't waste our time and our money. We have already had too many commissions and investigations. After Enron, WorldCom, and the rest of the early 21st century frauds, we had Sarbanes-Oxley and lots of new regulations. It didn't seem to stop it from happening again. #1. We need to enforce the laws already on the books. #2. We need more ethics in our society - in our corporations, our government, our schools, our churches, our families. Without that, no amount of new laws will work. #3. We have to consider the possiblity that our capitalistic system, as we knew it, may have evolved to a point where it needs to be modified. How? I don't know, but when when we as a society can accept athletes, executives, actors, making tens of millions of dollars while more than 10% of the population is out of work, we have a problem.

[Wallstrafed]

Is it really that complicated? Wall Street made end runs around 1) the SEC (which engaged in their usual head-in-the-sand toothless enforcement); and 2) Sarbanes-Oxley through hedge funds. These criminals promoted unregistered financial instruments. They knew they had a problem with the financial instruments being collectible so they dreamed up the AIG guarantees. The Democrats sat back and watched as their formerly credit worthless constituents moved into houses they never should have been allowed to purchase. The Republicans (amd Democrats) also didn't have a problem with Goldman et al being allowed to promote their packaged fraud ("CDOs") and generally lining their pockets to the nth degree. Result: the whole world (and their meager 401(k)'s) had to deal with the fallout regardless of whether they sought to avoid this garbage or not.

[Charles D Bailin]

Doug Nolan, an economist with Prudent Bear Funds, has been predicting this meltdown since the year 2000. His speeches and writings have laid out the foundation for the mortgage meltdown in detail. He described the weaknesses of the GSE's and the impact of unrestricted credit expansion through Wall Street. Wouldn't someone with his foresight contribute some reality to this proposed investigation?