What Caused the Crisis?

By taking lessons from the original commission in its design and execution, the recently established Financial Crisis Inquiry Commission (FCIC) can ensure that it provides the insights necessary to understand what caused the crisis and, in so doing, to protect the nation from future collapses.

 

"Legal chicanery and pitch darkness were the banker's stoutest allies."

- from Wall Street Under Oath, 1936, the memoir of Ferdinand Pecora

In 1933, Ferdinand Pecora - lead counsel for the Senate Banking and Currency Committee inquiry - led an investigation into the causes of economic collapse that preceded the Great Depression. His unrelenting investigation provided the evidentiary basis for legislation that restored market integrity and rebuilt public confidence in the financial markets and the banking system. For 45 years - until many of the New Deal protections were removed by de-regulation and insufficient supervision - these laws formed the basis of an economic structure that created prosperity and withstood crisis.

By taking lessons from the original commission in its design and execution, the recently established Financial Crisis Inquiry Commission (FCIC) can ensure that it provides the insights necessary to understand what caused the crisis and, in so doing, to protect the nation from future collapses.