A new law has created a Financial Crisis Inquiry Commission that will “examine the causes, domestic and global, of the current financial and economic crisis.”
The commission is supposed to report by Dec. 15, 2010, on its findings.
Topics to be considered will include “affiliations between insured depository institutions and securities, insurance, and other types of nonbanking companies,” according to the text of the new law.
The commission also will investigate “the concept that certain institutions are ‘too-big-to-fail’ and its impact on market expectations,” and “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.”
In some cases, the commission may issue reports on specific financial institutions.
The inquiry commission will have 10 members, all appointed by congressional leaders, and it will have the authority to issue subpoenas.
President Obama recently put the law into effect by signing S. 386, the Fraud Enforcement and Recovery Act of 2009.
The main purpose of FERA is to improve enforcement of laws and regulations prohibiting mortgage fraud, securities and commodities fraud, financial institution fraud, and other frauds related to federal assistance and relief programs.