Former Senator Bob Graham of Florida Describes What The Financial Crisis Inquiry Commission is Probing
Monday, July 27, 2009SUZANNE PRATT: The Fed is not the only one looking into the financial crisis. Congress has also set up a Financial Crisis Inquiry Commission to investigate the root causes. Former senator and Florida Governor Bob Graham is one of its 10 members and he joins me now. Senator, welcome to the program.
FORMER SEN. BOB GRAHAM (D) FLORIDA: Thank you very much, Suzanne. I appreciate joining you in my home town with my friend Paul.
PRATT: Nice to have you here. Let me start with sort of just an explainer. The commission has been set up to examine many different areas of the financial crisis. Now, do you view this as a fact-finding mission or will there actually be recommendations that come out of it?
GRAHAM: Both. We are directed by the Congress to do a thorough examination of the causes of the current financial crises much like the Pecora Commission did in the 1930's and then to make recommendations as Pecora did, which lead to things like the Securities and Exchange Commission.
PRATT: Right, you beat me to my second question which was going to actually be about the Pecora Commission. A lot of people are drawing parallels between this commission and the Pecora Commission and out of the Pecora Commission came some very significant financial reform. Now do you think it's fair to draw those kind of parallels? Is that sort of the right thing to do?
GRAHAM: It's certainly is a challenging standard for our commission because the Pecora Commission, which was actually a committee of the United States Senate, did such an outstanding job of analysis and then prescription. We are going into this, 10 members, Republicans and Democrats with the goal of having a report, which will do a thorough analysis of what has happened, because the American people have been severely damaged by the experience of the last year and what can we contribute to avoiding a repetition.
PRATT: Now, by the time your commission makes its rulings or gives its report, it will be the end of next year, if I'm not mistaken, correct, the end of 2010?
GRAHAM: December of 2010 is our final date to report.
PRATT: Correct. Now do you believe that it's going to by then already be business as usual on Wall Street? I mean, isn't it going to be sort of a bit late to be making these recommendations?
GRAHAM: No. We don't want to be a commission that delays the process of dealing with current problems. We look forward to assisting the Congress and the Treasury and the White House as they collectively make decisions. What we want to do is build a record of what has happened to the American economy and then make recommendations in addition to those that may have already been put into place to avoid repetition.
PRATT: It may be confusing I think to some of our viewers to be examining the system that failed while at the same time we're currently trying to rewrite the rules. How do you see those two processes working sort of side by side?
GRAHAM: I think it's a little bit like a physician. The first thing the physician tries to do is listen to your comments, test -- take laboratory samples and then diagnose what your problem is. Once that's determined, then you move to the question of recommendations. So our job is going to be to look at what has happened, to build a historical record, to try to understand what that record says in terms of the future and make recommendations as the Pecora Commission did that has served the nation very very well.
PRATT: I would be remiss if I didn't ask you what types of reforms that you would like to see come out of the financial crisis that we've all been living through in the last few years.
GRAHAM: I will answer your question, but I will say that I hope all the members going into this process with as much of an open mind as possible, because it's going to be very important that we reach a consensus if the recommendations of the commission are going to be helpful. I would say one thing. I'm interested in looking at is there were some countries which avoided this crisis, countries like Australia and New Zealand and to a large extent Canada. What did they do that we and much of western Europe didn't do, which contributed to our problems and their having gotten through this situation relatively unscathed.
PRATT: Senator, I think we have to leave it there. Good luck with your endeavor.
GRAHAM: Thank you very much Suzanne.
