Reply #4: Geithner, Paulson to address meltdown probe

[ozymandius]

WASHINGTON – A special panel investigating the financial crisis is preparing to hear from two key architects of the government's response: Former Treasury Secretary Henry Paulson and Treasury Secretary Timothy Geithner.

Geithner and Paulson will provide their perspectives on the so-called "shadow banking system" — a largely unregulated world of capital and credit markets outside of traditional banks. They will describe their roles in selling Bear Stearns to JPMorgan Chase & Co. after pressure from "shadow banking" companies made Bear the first major casualty of the crisis.

The pair will testify Thursday morning before the Financial Crisis Inquiry Commission, a bipartisan panel established by Congress to probe the roots of the financial crisis. It is the first time the panel has heard from either of the men who called the shots in late 2008 as the global financial system nearly collapsed.

In its first day of hearings on shadow banking Wednesday, the FCIC dissected Bear Stearns as a case study, and heard from former CEOs James Cayne and Alan Schwartz.

Wednesday's hearing marked Cayne's first public appearance in the aftermath of the crisis. Cayne was a flamboyant character who led Bear Stearns — a firm known for its go-against-the-grain scrappiness — for 15 years.

http://news.yahoo.com/s/ap/20100506/ap_on_bi_ge/us_meltdown_investigation