Today, he is emerging as one of the nation’s archreformers, pushing to impose some of the most stringent new financial regulations in history. And as the head of the Commodity Futures Trading Commission, the leading contender to oversee the complex derivatives contracts that played a central role in the financial crisis and, in turn, the Great Recession, he is in a position to influence the outcome.
It may seem an unlikely conversion, but it is one that has won the approval of Brooksley E. Born, of all people, a former outspoken head of the commission. She sounded alarms more than a decade ago about the dangers hiding in the poorly understood derivatives market and was silenced by the same Washington power brokers that counted Mr. Gensler as a member.
Mr. Gensler opposed Ms. Born, according to people who worked at the commission in the 1990s, and in 2000 played a significant role in shepherding through Congress deregulation measures that led to explosive growth of the over-the-counter derivatives market.
That was then. These days, Ms. Born is convinced of Mr. Gensler’s reformist zeal, as he takes on Wall Street in what is becoming one of the fiercest battles over regulation in the postcrisis era.
“I think he is doing very well,” she said in an interview. “He certainly seems to be committed to robust oversight of derivatives and limiting excessive speculation and leverage.”
The proposals championed by Mr. Gensler, if adopted by Congress, would substantially alter what is now a largely unregulated market in over-the-counter derivatives, financial instruments used by companies and investors to protect themselves and bet on moves in variables, like interest rates or currencies, and to speculate.
The proposals include forcing the big banks that sell derivatives to conduct their trades in the open on public exchanges and clear them through central clearinghouses, so that any investor can see the prices that dealers charge their customers. Today, those transactions are bilateral and private.
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Skeptical Debunker on 05 Mar 10One of the most bewildering aspects of the current health care debate is the failure to learn key lessons from health systems abroad. Conservative talk show hosts decry the alleged evils of "socialized medicine" in countries with universal health coverage; they warn grimly of rationed health care. Yet there's nary a peep from Rush Limbaugh or Glenn Beck - let alone Congress - about countries such as Germany, France, Switzerland or Japan, where coverage is universal, affordable, and top quality, and patients see private doctors with little or no waiting. And, oh yes, their health costs are a fraction of our bloated numbers: The French spend 10 percent of GDP on health care, the Germans 11 percent, and they cover every citizen. We spend a whopping 17 percent and leave tens of millions of Americans uninsured. If you want a very readable short course on how European systems really work, take a look at "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care," by T.R. Reid, a former Washington Post foreign correspondent. You might also watch a fascinating 2008 Frontline series, available online, in which Reid was an adviser: "Sick Around the World: Can the U.S. Learn Anything From the Rest of the World About How to Run a Health Care System?"
