Never Again,' Again: A Functional Examination of the Financial Crisis Inquiry Commission

"NEVER AGAIN," AGAIN: A FUNCTIONAL EXAMINATION OF THE FINANCIAL CRISIS INQUIRY COMMISSION THE FINANCIAL CRISIS INQUIRY REPORT: FINAL REPORT OF THE NATIONAL COMMISSION ON THE CAUSES OF THE FINANCIAL AND ECONOMIC CRISIS IN THE UNITED STATES. By Staffof the Financial Crisis Inquiry Commission. Official Government Edition. Washington, D.C.: Government Printing Office. 2011. Pp. xxviii, 533. $29. Available at http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPOFCIC. pdf. Authorized Edition. New York: PublicAffairs. 2011. Pp. xxviii, 450. $14.99.INTRODUCTIONDespite the benefit of five years to heal its wounds, the United States remains hobbled from the devastating economic injuries of the 2007-08 global financial crisis. Families across the country still struggle with overwhelming debt and debilitating joblessness. The financial innovations that were once seen as a path to broader homeownership and greater financial equality nearly led to a once-unthinkable catastrophe, and ironically, have worked to widen the gap between rich and poor.These events took many top business leaders and regulators by surprise.1 After the crisis abated, legislators and other policymakers sought to understand how a financial crisis of such severity could arise undetected in one of the world's most advanced and well-regulated economies. To this end, in May 2009 Congress created the Financial Crisis Inquiry Commission ("FCIC"). The FCIC was composed of commissioners "with national recognition and significant depth of experience in such fields as banking, regulation of markets, taxation, finance, economics, consumer protection, and housing,"2 and Congress charged it with analyzing the causes of the global financial crisis.3 After an eighteen-month investigation, during which the FCIC's commissioners and staff"reviewed millions of pages of documents, interviewed more than 700 witnesses, and held 19 days of public hearings" (p. xi), the FCIC made public its book-length final report, titled The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. The Report attributed the crisis to "widespread failures in financial regulation and supervision" (p. xviii); "dramatic failures of corporate governance and risk management at many systemically important financial institutions" (p. xviii); "excessive borrowing, risky investments, and lack of transparency" (p. xix); the government's "ill prepar[ation] for the crisis, and its inconsistent response" (p. xxi); and "a systemic breakdown in accountability and ethics" (p. xxii). Though commissioned for submission to the President and Congress,4 The Financial Crisis Inquiry Report also attracted significant popular attention, spending two weeks on the New York Times Best Sellers' List for Paperback Nonfiction.5The idea of a postcrisis congressional investigation into the causes of a financial crisis is not new; indeed, postcrisis investigations have a pedigree that can be traced back to at least the beginning of the twentieth century. Banking panics punctuated the economically tumultuous late years of the nineteenth century,6 and at the century's close, federal legislators realized that the frequency of such panics required a stronger federal solution.7 Since then, postcrisis investigations have been fixtures appurtenant to all financial crises. The earliest of these investigations began in May 1908, when Congress created a new joint committee, the National Monetary Commission ("NMC"), and tasked it with developing recommendations for financial and monetary reform.8 Nearly four years later, in February 1912, the House of Representatives authorized its Committee on Banking and Currency, then chaired by Representative Arsene Pujo, to conduct an investigation into the concentration of power in the financial sector.9 And in 1932, the Senate Committee on Banking and Currency began an examination of short selling10 that grew into a broad inquiry into stock-exchange practices. …