Attempts at Relief and Reform

Still Trouble With Derivatives

Posted on Sunday, October 11, 2009

The challenge of controlling the derivative products that contributed to our current economic crisis are still with us. At issue is balancing systemic risk but still maintaining access to reasonably priced products needed by so many, and in particular now in the commercial real estate industry, to control costs and manage risks in their daily development and business operations. Some of the proposals requiring derivatives to be more standard, centrally cleared or more highly collateralized threaten to increase the cost of doing business but may be a necessary evil.

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Thanks Keith!


Quick note related to derivatives----last Tuesday October 20th, PBS's "Frontline" program devoted an hour to OTC derivatives. The show was entitled "The Warning" and it chronicled the losing battle waged by Brooksley Born as head of a second-tier federal regulatory agency as she tried to sound the alarm on OTC derivatives but was aggressively shot down by Fed Reserve's Alan Greenspan and Treasury Secretary Robert Rubin and other DC power brokers in the summer of 1998. This program can be viewed online at by linking via the "Frontline" home page. Watching this program greatly increased my awareness of how corrupt and greedy high-ranking officials were that served under both Democratic and Republican presidents. PS--Shari Olefsen---saw you on CSPAN2's Book TV and bought your book and absolutely loved it. Keep up the good work !!!

Keith in Rockford, Illinois 10/24/2009
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