"Financial Regulatory Reform -- Imperative for Our Future" Featuring Brooksley Born

Location

Brooksley Born, chair of the Commodity Futures Trading Commission (CFTC) from 1996-1999, will present a public talk titled, "Financial Regulatory Reform--Imperative for Our Future," at the Woodrow Wilson School as part of the Wilson School's "Economic Recovery: Perils, Politics and Possibilities" thematic lecture series.

In 1998, with the near collapse of Long Term Capital Management, a trillion dollar hedge fund that used derivatives to leverage $5 billion into more than $1 trillion with the help of fifteen of Wall Street’s largest financial institutions, Born warned of the need for greater transparency and regulation of the derivatives market. However, her warnings were opposed by other regulators. And Congress, under pressure from the financial industry, passed legislation prohibiting the regulation of derivatives by the CFTC. Many believed that this refusal to heed Born’s concerns was a harbinger of the 2008 financial crisis.

In 2009, Born 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 financial crisis.” In presenting the award, Caroline Kennedy noted, “…Brooksley Born recognized that the financial security of all Americans was being put to risk by the greed, negligence and opposition of powerful and well connected interests…”

In July 2009, House Speaker Nancy Pelosi appointed Born as a commissioner to the Financial Crisis Inquiry Commission (FCIC), which was charged with investigating the causes of the financial and economic crisis of 2007-2010. The ten-member bi-partisan commission issued its findings in January 2011, concluding that the financial crisis of 2008 was “avoidable,” and largely caused by widespread failures in government regulation, corporate mismanagement, and excessive risk-taking by Wall Street.