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Angelides Testifies
Before European Parliament

April 12, 2011 (EIRNS)—Phil Angelides, chairman of the U.S. Financial Crisis Inquiry Commission, gave what was received as "historic" testimony before the European Parliament's Committee on the Financial and Social Crisis on April 11. He was invited by committee, after its members had met with him in the United States earlier this year. The appearance can be expected to spur action on the establishment of such commissions in Europe, and on imposing a Glass-Steagall standard on banking, a matter already under extensive discussion in European capitals.

Angelides gave a hard-hitting one-hour presentation on the findings and conclusions of his commission's report. Stressing that the crisis "was not an act of God," but would have been avoided, "if the regulators and politicians" had chosen to act, he said it would be the biggest of "tragedies" to accept the idea that it was not avoidable. He detailed the takedown and failure of the regulatory system, including Glass-Steagall; he hit hard at the criminality of Wall Street, singling out former Federal Reserve chairman Alan Greenspan for strong attack. Among other key points, he hit at the role of over-the-counter derivatives, shadow banking, and the corrupt role of the rating agencies. He reiterated that the culprits who created the crisis have not been brought to justice. He also deplored the fact that the current Congress has been cutting the budgets of all the regulatory authorities, including the Securities and Exchange Commission, which earns through fines, far more than its budget.

From the praise and the questions posed by the members of the European Parliament who comprise the committee, it was clear that his presence and presentation had a remoralizing effect. Lega Nord MEP Mario Borghezio asked Angelides whether he would consider the reinstatement of Glass-Steagall as a key remedy. While Angelides did not openly endorse its reinstatement, he made clear that its withdrawal was crucial to creating the crisis. He said that the takedown of Glass-Steagall had occurred over a period of 30 years, and gave the example of Citigroup, which, after its repeal, became hopelessly involved in gross speculation and risk-taking.

In her concluding remarks at the end of the two-and-a-half-hour session, the committee's rapporteur made reference to the question of Glass-Steagall, making the point that it would be including in the communiqué of the committee.