The Go-Go ’90s
Alan Greenspan rules the economy and “the less regulation, the better” is the administration’s attitude toward Wall Street.
Brooksley Born Arrives on the Scene
She heads up the Commodity Futures Trading Commission and sees danger in a new, highly-lucrative market: over-the-counter derivatives.
“Get This Lady Off Our Backs”
Brooksley Born’s idea to regulate derivatives meets swift and fierce opposition from the Clinton economic team.
After Born tells staff to take the first step in regulating derivatives, the powers that be in Washington go to war to stop her.
1998 – Born’s Warning Becomes a Prophecy
High-flying hedge fund LTCM nearly melts down. Some in Congress clamor for regulating derivatives. But Greenspan is unyielding.
Late 2008 – Born’s Nightmare Comes True
After Lehman’s bankruptcy, markets crash, credit freezes. Many huge banks’ toxic assets are tied into over-the-counter derivatives.