Clinton: I Was Wrong to Listen to Wrong Advice Against Regulating Derivatives
I asked former President Bill Clinton if he thought he got bad advice on regulating complex financial instruments known as derivatives from his former Treasury Secretaries, Robert Rubin and Larry Summers. He acknowledged that he was wrong to take the advice of those advising him against regulating derivatives.
“On derivatives, yeah I think they were wrong and I think I was wrong to take [their advice] because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don’t need any extra protection, and any extra transparency. The money they’re putting up guarantees them transparency,” Clinton told me.
The former President also said he was also wrong about understanding the consequences if the derivatives market tanked.
Clinton also blamed the Bush administration for scaling back on policing the financial industry. “I think what happened was the SEC and the whole regulatory apparatus after I left office was just let go.”
Much of the financial carnage of the past several years, Clinton said, could have been prevented if only his appointed regulator had been kept on after he left office.. “I think if Arthur Levitt had been on the job at the SEC, my last SEC commissioner, an enormous percentage of what we’ve been through in the last eight or nine years would not have happened.”
Clinton said he regretted not trying to regulate derivatives, but that Republicans would have stood in the way.
(Excerpt) Read more at blogs.abcnews.com
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