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elleng Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-12-08 07:52 PM
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73. More significant info
Edited on Sun Oct-12-08 07:59 PM by elleng
'The nations leading financial officials Levitt, Federal Reserve Chairman Alan Greenspan, Secretary of the Treasury Robert Rubin, and his deputy Lawrence Summers pummeled the proposal, saying it was dangerous to even discuss the idea. Led by Rubin, Levitt and Greenspan, the Clinton White House instead proposed a modest set of reforms. Months later, Clinton Administration officials walked away from their own recommendations, concluding the market could be best managed by the financial industry.

Neither Rubin, Summers, nor Greenspan would comment for this story. Rubin and Summers are serving as economic advisers to Democratic presidential nominee Barack Obama, who has repeatedly blamed the financial crisis on regulatory failures of the Bush Administration.

Levitt, the longest serving head of the SEC, said Democrats and Republicans should be held responsible. Asked about Democratic House Speaker Nancy Pelosis observation that the financial collapse can be blamed on the anything goes policies of the Bush Administration, Levitt said, No, I think it goes back before that. This was decided under Clinton as well.' /


...Long-Term Capital was looked at as such an aberration, recalled Levitt, that the Working Group did not see the need for systemic change. He also said that strong personalities like Sen. Phil Gramm (R-Texas) the banking committee chairman, opposed the change.

Phil Gramm in particular, with Alan Greenspan, were patron saints of the derivatives business, says Levitt. They clearly wanted that business to be unregulated.

During the production of the April 1999 report, Brooksley Born retired, and with her exit, impetus for regulation disappeared. Larry Summers replaced Bob Rubin as Treasury Secretary soon after. Six months later, a new Presidents Working Group report (pdf) suggested that, far from regulating derivatives, Congress should expressly exempt them from oversight. Later that month, the commission quietly withdrew its proposal.

In late 2000, Gramm, currently one of the top economic advisers for Republican presidential nominee Sen. John McCain, sponsored an amendment that, among other things, prohibited the commission from regulating derivatives.'

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