The Financial Crisis Inquiry Commission got off with a bang today, and top bankers were hauled before Congress to explain, in ten words or less, why the financial world basically imploded last year. How the inquiry goes today could affect how banks restructure their management and pay practices -- so job seekers should sit up and pay attention.
Lloyd Blankfein, John Mack, Jamie Dimon and Brian Moynihan all stood before the ten-person bipartisan panel to concede some failure while still defending their actions of the past two years. Vikram Pandit, surprisingly, was not in attendance. And after the testimony he went through last year, Ken Lewis must have been enormously relieved not to have been forced there today -- we feel slightly bad for Moynihan for being newly-minted and already facing the firing squad.
The panel, which at times seemed to forget that the session wasn't a college freshman introductory course to banking, pressed the bankers on what they thought were the most negligent things the firms had done.
Blankfein answered that Goldman extended more leverage to PE firms than it should have, but did not admit outright that the firm had been negligible.
John Mack seemed most willing out of the four for the possibility of increased federal regulation. As in a previous speech, he called for a systemic risk regulator and a government clearinghouse for sophisticated instruments like derivatives and credit default swaps.
For his part, Jamie Dimon said that JPMorgan had made changes to compensation with the implementation of clawbacks that would discourage risk-taking.
So far, there's been little of the histrionics displayed at past Congressional inquiries, like the time a certain congressman chose to scream nonstop for five minutes at the witnesses.
As the inquiry continues, job seekers can look for clues as to how the government's intervention will influence how banks will run in the future.
Check back for more updates on how the inquiry goes down this afternoon.
Write to Julie Steinberg