The Cement Life Raft - Prof. Elizabeth Warren briefs First Lady Clinton on Bankruptcy Bill

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16. Brooksley Born: Still Telling the Uncomfortable Truths About Wall Street

By Pam Martens and Russ Martens
Wall Street on Parade, May 7, 2015

EXCERPT...

But the segment of the conference that has galvanized Wall Street reformers were the speeches by Brooksley Born, the former Chair of the Commodity Futures Trading Commission, and Anat Admati, a professor of finance and economics at Stanford University, a chief architect of the conference.

Brooksley Born is best known as the sole regulator in the Clinton administration who attempted to regulate derivatives and became the target of bullying by then Treasury Secretary Robert Rubin, his enforcer, Larry Summers, and Fed Chair Alan Greenspan. Frontline aired an expose on the guts Born summoned to stand up to the Wall Street enablers’ cartel. In the end, of course, Wall Street had its way and derivatives remained unregulated. Born resigned her post.

In her talk at the conference, Born takes on the preposterous proposition that markets can self-regulate. During her time at the CFTC, Born said Wall Street had poured billions of dollars into deregulation lobbying which was “supported by the fallacious beliefs championed notably by Alan Greenspan that financial markets are self regulating and that financial firms are capable of policing themselves.”

Born told the crowd that the dangers have only grown since the collapse:

[font color="green"]“The power and influence of the financial sector threatens a continuation of the regulatory capture that contributed to the financial crisis. Financial firms, too often, have significant say in the appointment of high regulatory officials. The tendency of some former government officials to obtain highly lucrative positions in the financial sector after leaving government may well act as an inducement to those remaining in government to serve the interest of the financial sector rather than those of the public.”[/font color]

Born reminded the audience that since the enactment of the Dodd-Frank financial reform legislation, the country has witnessed more frauds, manipulations and reckless behavior on the part of the very same financial firms, adding:

[font color="green"]“With respect to derivatives trading, JPMorgan lost $6 billion through speculative trading of the London Whale and both MF Global and Peregrine Financial went bankrupt after allegedly engaging in misappropriation of customer funds. In light of all this, we must ask ourselves whether the financial and political power of our largest financial firms poses a threat to our policy making on financial regulation and seriously undercuts the administration of justice.”[/font color]

Born also cautioned the public against believing that the derivatives’ market has been fixed, stating:

[font color="green"]“Dodd-Frank gave the Commodity Futures Trading Commission an enormous new responsibility to impose regulation on this previously unregulated market which was a significant cause of the financial crisis and which is currently estimated to be $400 trillion in notional amount [face amount] in the United States and almost $700 trillion globally. It’s actually larger than it was at the time of the financial crisis…The jury is still out on whether the regulatory regime under Dodd-Frank will be adequate to address the dangers of this market…"[/font color]

According to Born, too many exemptions have been carved out in the derivatives arena under Dodd-Frank, including derivatives used for hedging and foreign exchange swaps.

CONTINUED...

http://wallstreetonparade.com/2015/05/brooksley-born-still-telling-the-uncomfortable-truths-about-wall-street/

Thank you, amborin! TRILLIONS for Wall Street. Nothing for Detroit, except some busses (Thanks, Joe Biden!). Not trying to be a Debbie Downer, just want Democrats to know who their friends are when it comes to money, FED and fiscal policy.