.... ~~ Brooksley Born was on the money. Former agency chief defied the ‘big boys,’ foresaw fiscal crisis. Terry Schlemeier Sunday, June 13, 2010 at 8:00 am, Updated: 4:59 pm, Tue Jan 22, 2013. She became good friends with Hillary Rodham Clinton, and when Bill Clinton was elected president, Hillary Clinton invited Brooksley Born to Little Rock, Ark., to meet with the president-elect. She hoped Born would be a suitable candidate for attorney general. It was not to be, but Clinton did offer her a position on the Commodity Futures Trading Commission (CFTC). In 1996, he promoted her to chairwoman. The CFTC is, to most, an obscure agency charged with “protecting market users, and the public, from fraud, manipulation and abusive practices … related to the vast array of financial instruments.” Born immediately noted there were approximately $70 trillion of derivatives being traded on the market without regulation or supervision and said publicly she would begin writing regulations to control the sale and accountancy of such sales. The “big boys” — Fed Chairman Alan Greenspan, Treasury Secretary Robert Rubin, Deputy Treasury Secretary Larry Summers and Arthur Levitt, chairman of the SEC — held hands and decided to quell this disturbance from someone who “didn’t know what she was doing.” Summers called Born at her office and said: “I have 13 bankers in my office, and they say if you go forward with this (regulations), you will cause the worst financial disaster since World War II.” Born responded by writing a position paper and proposed regulations of the derivative market. The courage it took for her to defy Greenspan, who was called the “Oracle” in the mid-’90s, and the others required Promethean gall. The “boys” were successful in prompting Congress to write a resolution prohibiting the CFTC from issuing any rules governing the derivative market. If you can’t do your job, you quit, which is exactly what Born did in 1999. Between the time of the congressional rebuke and her resignation, we had an unusual happenstance: The hedge fund Long Term Capital Management, dealing in derivatives on a leveraged basis, nearly collapsed. The Treasury Department and the Federal Reserve were forced to bail the fund out to preserve national and international financial stability. What’s $50 billion to us taxpayers? columbiatribune/opinion/op-ed/brooksley-born-was-on-the-money/article_57874463-d66b-5096-8bde-014e348fac35.html
Posted on: Wed, 13 Aug 2014 04:30:14 +0000
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