The Little Agency That Could
By JOE NOCERA, NYT
One of the big criticisms of the original team of financial regulators brought in by President Obama is that too many of them had worked in Bill Clinton’s Treasury Department. That, of course, was the Treasury Department run by Robert Rubin and then by Lawrence Summers — an agency with a bias toward deregulation. Those regulators had supported the elimination of Glass-Steagall, the 1930s law that separated investment banks from commercial banks, and were disinclined to regulate derivatives, “those financial weapons of mass destruction,” as Warren Buffett liked to call them.
One of those old Rubin hands was Gary Gensler. An 18-year veteran of Goldman Sachs, Gensler had been the assistant secretary of financial markets under Rubin, and then later undersecretary for domestic finance, and he shared his boss’s deregulatory bias.
When President Obama was picking his regulatory team, he chose Gensler to be the chairman of the Commodities Futures Trading Commission. Now, Gensler is about to leave that post. And if people once doubted how tough he would be as a regulator, there is no doubt now: he may well be the single best appointment Obama made.
When he came into office, the C.F.T.C.’s job was to regulate the futures market. It was a small agency, with fewer than 700 employees. Then came the Dodd-Frank reform law, which gave the commission enormous new responsibilities. It was charged with writing dozens of rules to regulate derivatives, and to oversee a $400 trillion market. “I hadn’t realized how much authority was delegated to regulators,” he said. But he embraced the challenge. Derivative trades had always been conducted in the shadows; Gensler brought them into the light.
(More here.)
One of the big criticisms of the original team of financial regulators brought in by President Obama is that too many of them had worked in Bill Clinton’s Treasury Department. That, of course, was the Treasury Department run by Robert Rubin and then by Lawrence Summers — an agency with a bias toward deregulation. Those regulators had supported the elimination of Glass-Steagall, the 1930s law that separated investment banks from commercial banks, and were disinclined to regulate derivatives, “those financial weapons of mass destruction,” as Warren Buffett liked to call them.
One of those old Rubin hands was Gary Gensler. An 18-year veteran of Goldman Sachs, Gensler had been the assistant secretary of financial markets under Rubin, and then later undersecretary for domestic finance, and he shared his boss’s deregulatory bias.
When President Obama was picking his regulatory team, he chose Gensler to be the chairman of the Commodities Futures Trading Commission. Now, Gensler is about to leave that post. And if people once doubted how tough he would be as a regulator, there is no doubt now: he may well be the single best appointment Obama made.
When he came into office, the C.F.T.C.’s job was to regulate the futures market. It was a small agency, with fewer than 700 employees. Then came the Dodd-Frank reform law, which gave the commission enormous new responsibilities. It was charged with writing dozens of rules to regulate derivatives, and to oversee a $400 trillion market. “I hadn’t realized how much authority was delegated to regulators,” he said. But he embraced the challenge. Derivative trades had always been conducted in the shadows; Gensler brought them into the light.
(More here.)
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