Panel Investigating Financial Crisis to Question Bankers

By DAMIAN PALETTA and JOHN D. MCKINNON

WASHINGTON -- The Financial Crisis Inquiry Commission will require top bankers and regulators to testify under oath in the coming week when its first public hearings get under way, the panel's chairman and vice chairman said Friday.

The Financial Crisis Commission will require top bankers and regulators to testify about the causes of the financial crisis. WSJ's John McKinnon details what to expect from the hearings in an interview with Kelsey Hubbard.

Chairman Phil Angelides, a Democrat, and Vice Chairman Bill Thomas, a Republican, said in an interview that the commission also plans to call Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to testify under oath in the months ahead.

J.P. Morgan Chase & Co. Chief Executive James Dimon, Bank of America Corp. Chief Executive Brian Moynihan, Morgan Stanley Chairman John Mack, Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein and Federal Deposit Insurance Corp. Chairman Sheila Bair are among those expected to testify on Wednesday and Thursday.

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Republican Bill Thomas

The panel, established by Congress last year, got off to a slow start due to the complications of hiring staff and opening an office. But looming hearings show the panel is shifting into action and beginning to make its weight felt among banks and regulators.

But its focus isn't going to be on influencing legislation to overhaul financial-sector regulations, which has been moving through Congress as some lawmakers had envisioned. Instead, the committee is settling into the task of developing a detailed investigative report -- due in December -- on the causes of the financial crisis.

"There is anger and confusion across this country, and people want to know," said Mr. Angelides, a former California state treasurer. He said one of the commission's roles is to act as a proxy for the American people in unraveling the complex crisis, despite encountering some angst over its investigation into the events that precipitated it.

"There's an undercurrent of, 'Hey, things are moving along. Why dig this stuff up?' " Mr. Angelides said.

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Democrat Phil Angelides

Mr. Angelides said the emphasis is about gathering "facts and about the series of events that occurred" rather than trying to "get people."

The commission is expected to hold eight or nine hearings, on a range of topics including regulation, subprime lending, how companies became "too big to fail," derivatives, and the role of the credit-rating agencies. The leaders said they hadn't yet issued subpoenas but would do so if they felt government or industry officials were withholding information.

"I've found that if you have [the power to issue subpoenas] and you ask nicely, you don't have to tell them the consequences of 'no,' " said Mr. Thomas, the former chairman of the House Ways and Means Committee.

Asked why a representative of Citigroup Inc. wasn't on the witness list for next week's hearings, Mr. Angelides said, "They'll have their day. They shouldn't feel bad, or left out."

Write to Damian Paletta at damian.paletta@wsj.com and John D. McKinnon

at john.mckinnon@wsj.com