Thursday, January 14, 2010

When interrogation is terror -- and when it is not

Panel Rips Wall Street Titans (WSJ)
a committee investigating the financial crisis grilled the nation's top bankers Wednesday in the latest example of Washington's smoldering anger at an industry many there feel hasn't atoned for its role in the slump.

[The story characterized the "grilling" as] reminiscent of the Pecora hearings that investigated the 1929 crash that led to the Great Depression. [USA Today says those hearings would be a hard act to follow.]

commissioners asked probing questions about the banks' possible acts of negligence, their duties to customers and other issues that could crop up in such cases.

the confrontation between Wall Street and Washington quickly turned personal.

Republicans on the bipartisan panel expressed more sympathy for banking-industry leaders.

Morgan Stanley Chairman John Mack struck a conciliatory tone. "There is no doubt that we as an industry made mistakes," he said. "The financial crisis also made clear that regulators simply didn't have the visibility, tools, or authority to protect stability of the financial system as a whole."

After the hearing, Mr. Blankfein left the room, while Mr. Dimon of J.P. Morgan Chase stayed to answer a few questions. "I felt they were looking for answers," and not seeking to embarrass the CEOs, Mr. Dimon said.

There seems to Guambat to be a disconnect between the attention grabbing headline and the actual story; is that simply an editorial touch by the Journal? The following story simply corroborates that feeling and suspicion.

Few Burns for Four Bankers on the Hot Seat (NYT)
For those anticipating a cathartic ceremony of dressing-downs, apologies or verbal brawling, there was little of it during the three-and-a-half-hour hearing. Nor did the circular House hearing room resemble anyone’s idea of a circus tent; it was packed but quiet, scattered with a few innocuous protesters. The 10 commissioners pressed the bankers on executive compensation, on managing risks and on lending practices, keeping up a brisk pace while the witnesses fidgeted like busy people who all had planes or trains to catch.

The initial round of questions and responses provoked disapproval, a few pointed fingers and sporadic shows of humility from the witnesses.

Guambat wonders if they ever got around to doing away with water boarding? And if that would make these hearings perhaps as interesting and popular as the Pecora hearings?

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