Thursday, April 09, 2009

The woman who might have prevented this disaster

A decade ago, Stanford law school graduate Brooksley Born headed the Commodity Futures Trading Commission. As she learned more about the derivatives market that was rapidly growing in the financial industry, she was alarmed by the lack of transparency into what was going on as well as the fact that the market was completely unregulated.

She proposed some very basic steps that would have helped the government to better understand the risks involved but was met with stiff resistance from Clinton administration officials Robert Rubin and Larry Summers, not to mention Federal Reserve chief Alan Greenspan. Ultimately, Congress passed legislation preventing Born from taking any steps to regulate this new and profitable market.

You know the rest of that story, but here's the story of Born, the woman who might have averted it all.



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