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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Bill who wrote (584004)	9/2/2010 10:46:52 AM
From: Alighieri	Respond to of 1573088

Do you have a point to make? Al ============================================================= Born and the OTC Derivatives Market Born was appointed to the CFTC on April 15, 1994 by President Bill Clinton. Due to litigation against Bankers Trust Company by Procter and Gamble and other corporate clients, Born and her team at the CFTC sought comments on the regulation of derivatives,[3] a first step in the process of writing comprehensive regulations. Born was particularly concerned about swaps, financial instruments that are traded over the counter between banks, insurance companies or other funds or companies, and thus have no transparency except to the two counterparties and the counterparties' regulators, if any. CFTC regulation was strenuously opposed by Federal Reserve chairman Alan Greenspan, Treasury Secretaries Robert Rubin and Lawrence Summers.[4] On May 7, 1998, former SEC Chairman Arthur Levitt joined Rubin and Greenspan in objecting to the issuance of the CFTC’s concept release. Their response dismissed Born's concerns and focused on the possibility that CFTC regulation of swaps and other OTC derivative instruments would increase legal uncertainty of such instruments, potentially creating turmoil in the markets, and reducing the value of the instruments. Further concerns voiced were that the imposition of new regulatory costs would stifle innovation and push transactions offshore.[7] An economic and financial crisis affected US and world markets in 2008. As it gained momentum, newspapers began reporting on some of its possible causes, including the rejection of the CFTC's proposals and the adversarial relationship Greenspan, Rubin and Levitt had with Born.[8][4] The disagreement has been described not only as a classic Washington turf war,[6] but also as a war of ideologies as Greenspan and highly placed Clinton administration officials believed that, in large measure, the capital markets could be trusted to regulate themselves.[9] Born declined to publicly comment on the unfolding 2008 crisis until March 2009 when she said: "The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been."[6] She also lamented the influence of Wall Street lobbyists on the process and the refusal of regulators to discuss even modest reforms.[6] An October 2009 Frontline documentary titled "The Warning" described Born's failed efforts to control regulation of and bring transparency to the derivatives market, and noted the continuing resistance thereto. The program concluded with an excerpted interview with Born sounding another warning: "I think we will have continuing danger from these markets and that we will have repeats of the financial crisis -- may differ in details but there will be significant financial downturns and disasters attributed to this regulatory gap, over and over, until we learn from experience."[9] In 2009 Born, along with Sheila Bair of the FDIC, was awarded the John F. Kennedy Profiles in Courage Award in recognition of the "political courage she demonstrated in sounding early warnings about conditions that contributed to the current global financial crisis". According to Caroline Kennedy, "...Brooksley Born recognized that the financial security of all Americans was being put at risk by the greed, negligence and opposition of powerful and well connected interests... The catastrophic financial events of recent months have proved them [Born and Sheila Bair] right. Although their warnings were ignored at the time, the American people should be reassured that there are far-sighted public servants at all levels of government who act on principle to protect the people’s interests."[10]