FCIC Commission Not Meeting Expectations

The Financial Crisis Inquiry Commission or FCIC, the ten member panel that has been given the task of identifying the main factors which caused the recent economic crisis is not likely to meet expectations. Panel members are believed to be struggling with several differences, leading to stagnation in the investigation process.

Critics accuse the commission members of lacking focus and concentrating on internal issues rather than taking up a structured and methodical investigative approach to the inquiry. Some members of the commission and government officials familiar with the work carried out therein were of the opinion that the commission’s work is being hampered severely by these conflicts.

The FCIC is expected to interview top ranking officials from a number of companies and from the government to identify the circumstances that contributed to the recession. These officials will include former chairman of the Federal Reserve Alan Greenspan who is expected to admit that the Fed failed to identify the risks which the dramatic expansion in financial institutions posed well before the bubble burst. If the Federal Reserve had remained alert and anticipated the consequences, the adverse effects of the economic downturn could have been mitigated, many experts believe.

Greenspan has already requested that his Brookings Institution report on the subject be included in the findings of the commission. In the report, he states that the housing and banking growth was not properly monitored by the Fed and the consequences of the expansion were not understood accurately.

Officials of many top banks will also be involved in the process and will be making an appearance before the commission. The FCIC is hoping to delve into the circumstances and decisions that caused subprime mortgages to grow out of proportion and set off the crisis.

Meanwhile, inside sources speak of serious ideological mismatches behind the scenes at the FCIC. The chairman and vice chairman are believed to have disagreed on disclosing parts of the reports collated so far to the public. Inordinate delays in appointing members when the commission was first appointed caused one member to resign way back even before the investigation got underway.

However, experts agree that the biggest challenge that the commission faces is the restricted time it has on hand. It has to submit a final report by December this year. Even if all internal conflicts are resolved, it is still a mammoth task to collate all the information and understand complex financial events within this deadline.

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