This, in journalistic parlance, is what we call a clip job. And that’s the trouble with much of the commission’s 545-page report. There’s lots of breezy, magazine-style, narrative prose. But there’s not much new information.
You can tell the writers knew they were sprinkling MSG on a bunch of recycled material, too, by the way they described their sources. The text and accompanying notes often seem deliberately unclear about whether the commission had dug up its own facts, or was rehashing information already disclosed in court records, news articles or other congressional inquiries.
- Set the purpose of the Commission, i.e. "to examine the causes, domestic and global, of the current financial and economic crisis in the United States."
- Set its composition of 10 members, appointed on a bipartisan and bicameral basis in consultation with relevant Committees. Six members are to be chosen by the congressional majority, the Democrats (three of these by the Speaker of the House and three by the Senate Majority Leader) and four by the congressional minority, the Republicans (two from the House Minority Leader and two from the Senate Minority Leader).
- Expressed the "sense of the Congress that individuals appointed to the Commission should be prominent United States citizens with national recognition and significant depth of experience in such fields as banking, regulation of markets, taxation, finance, economics, consumer protection, and housing" and also provided that "no member of Congress or officer or employee of the federal government or any state or local government may serve as a member of the Commission."
- Provided that Commission's chair be selected jointly by the congressional majority leadership and that the vice chair be selected jointly by the congressional minority leadership, and that the chair and vice chair may not be from the same political party.
- Set the "functions of the Commission" as:
"To examine the causes of the current financial and economic crisis in the United States, specifically the role of
- (A) fraud and abuse in the financial sector, including fraud and abuse towards consumers in the mortgage sector;
- (B) Federal and State financial regulators, including the extent to which they enforced, or failed to enforce statutory, regulatory, or supervisory requirements;
- (C) the global imbalance of savings, international capital flows, and fiscal imbalances of various governments;
- (D) monetary policy and the availability and terms of credit;
- (E) accounting practices, including, mark-to-market and fair value rules, and treatment of off-balance sheet vehicles;
- (F) tax treatment of financial products and investments;
- (G) capital requirements and regulations on leverage and liquidity, including the capital structures of regulated and non-regulated financial entities;
- (H) credit rating agencies in the financial system, including reliance on credit ratings by financial institutions and federal financial regulators, the use of credit ratings in financial regulation, and the use of credit ratings in the securitization markets;
- (I) lending practices and securitization, including the originate-to-distribute model for extending credit and transferring risk;
- (J) affiliations between insured depository institutions and securities, insurance, and other types of nonbank companies;
- (K) the concept that certain institutions are 'too-big-to-fail' and its impact on market expectations;
- (L) corporate governance, including the impact of company conversions from partnerships to corporations;
- (M) compensation structures;
- (N) changes in compensation for employees of financial companies, as compared to compensation for others with similar skill sets in the labor market;
- (O) the legal and regulatory structure of the United States housing market;
- (P) derivatives and unregulated financial products and practices, including credit default swaps;
- (Q) short-selling;
- (R) financial-institution reliance on numerical models, including risk models and credit ratings;
- (S) the legal and regulatory structure governing financial institutions, including the extent to which the structure creates the opportunity for financial institutions to engage in regulatory arbitrage;
- (T) the legal and regulatory structure governing investor and mortgagor protection;
- (U) financial institutions and government-sponsored enterprises; and
- (V) the quality of due diligence undertaken by financial institutions;
(2) to examine the causes of the collapse of each major financial institution that failed (including institutions that were acquired to prevent their failure) or was likely to have failed if not for the receipt of exceptional Government assistance from the Secretary of the Treasury during the period beginning in August 2007 through April 2009;
(3) to submit a report under subsection (h);
(4) to refer to the Attorney General of the United States and any appropriate State attorney general any person that the Commission finds may have violated the laws of the United States in relation to such crisis; and
(5) to build upon the work of other entities, and avoid unnecessary duplication, by reviewing the record of the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, other congressional committees, the Government Accountability Office, other legislative panels, and any other department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States (to the fullest extent permitted by law) with respect to the current financial and economic crisis.
- Authorized the Commission to "hold hearings, sit and act at times and places, take testimony, receive evidence, and administer oaths" and "require, by subpoena or otherwise, the attendance and testimony of witnesses and the production of books, records, correspondence, memoranda, papers, and documents." This subpoena power was also held by the Pecora Commission, but not the 9/11 Commission.
- Provided that "a report containing the findings and conclusions of the Commission" shall be submitted to the President and to the Congress on December 15, 2010, and that at the discretion of the chairperson of the Commission, the report may include reports or specific findings on any financial institution examined by the Commission.
- Provides that the chairperson of the Commission shall, not later than 120 days after the date of submission of the final report, appear before the Senate Banking Committee and the House Financial Services Committee to testify regarding the Commission's findings.
- Provides for the termination of the Commission 60 days after the submission of the final report.