I read the whole thing but I’m not sure what it said.
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What perhaps was the pivotal moment -- Commodity Futures Trading Commission Chair Brooksley Born's attempt to regulate credit default swaps -- was frustrated by Fed-head Alan Greenspan, SEC Chairman Arthur Levitt and Treasury officials Robert Rubin and Lawrence Summers in 1998, during the Clinton administration.
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A looming battle over re-regulation
Amid the economic chaos of 2008, Arthur Levitt Jr. stands out. He's one of the very few regulators of the Clinton and Bush eras to take responsibility for the current financial disaster—to admit that he botched things, big time. "All tragedies in life are preceded by warnings," the former chairman of the Securities and Exchange Commission told me in an interview Tuesday. "We had a warning. It was from Brooksley Born. We didn't listen to that." Brooksley Born was the head of Commodity Futures Trading Commission (CFTC) under Clinton. Beginning in the spring of 1998, she pushed for the regulation of derivatives trading. She warned of the dangers of a vast global financial market that was going unchecked by governments. But she was silenced by the then all-powerful team of Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin. Levitt, who along with Greenspan, Rubin and Born was part of the four-person President's Working Group on Financial Markets, opposed her efforts as well. Today, Levitt says he was wrong. "It may well have been that the proposal was ill thought-out," says Levitt, who served as SEC chairman longer than anyone, from 1993 to 2001. "But we could have taken that opportunity to refine it, to make it forward-looking. I think that the explosive growth of a product that was unlisted and unregulated should have occasioned greater reaction."
Levitt's concerns go beyond assuaging his conscience about the past. Along with other financial markets experts, he is worried that the incoming Obama administration, populated with protégés of Rubin and Greenspan, may continue to resist the necessary regulation needed to restore confidence in Wall Street and prevent another subprime-type disaster in the future.
I think it said [expletive deleted]