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Brooksley E. Born is a former American public official who, from August 26, 1996, to June 1, 1999, was chairperson of the Commodity Futures Trading Commission (CFTC), the federal agency which oversees the futures and commodity options markets as well as the individuals who participate in those markets.
In 1965 she joined, as an associate, the Washington-based international law firm of Arnold & Porter, where she subsequently rose to a partner. Her appointment as a member of the CFTC, on April 15, 1994, came after a career as head of the firm's derivatives practice, where she represented clients in numerous complex litigation and arbitration cases involving financial market transactions.
While on the commission and after becoming its chair two years later, Born sought comments on the need to regulate derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties (no actual regulatory scheme was proposed at the time). The request for comments, called the "Concept Release," stated that the growth of trade in derivatives had prompted the CFTC to re-examine its regulatory scheme.
The request for comments was opposed by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers. Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action.
In particular, these concerns focused on the risk that such discussion would increase legal uncertainty concerning swaps and other OTC derivative instruments and, thus, destabilize what had become a significant global financial market. They claimed potential turmoil created by the report and concerns about the imposition of new regulatory costs also might have stifled innovation and pushed transactions offshore.
As the financial crisis of 2008 gained momentum, newspapers began reporting on what might be some of its causes, including the adversarial relationship Greenspan, Rubin and Levitt had with Brooksley Born, with Greenspan leading the opposition, and how Born's recommendations were suppressed.
She is retired from Arnold & Porter and until recently had declined to comment on the unfolding crisis and her efforts to rein in the growing market for derivatives. "The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been." The disagreement has been described as a classic Washington turf war. She now laments the influence of Wall Street lobbyists on the process and the refusal of regulators to discuss even modest reforms.
In 1965 she joined, as an associate, the Washington-based international law firm of Arnold & Porter, where she subsequently rose to a partner. Her appointment as a member of the CFTC, on April 15, 1994, came after a career as head of the firm's derivatives practice, where she represented clients in numerous complex litigation and arbitration cases involving financial market transactions.
While on the commission and after becoming its chair two years later, Born sought comments on the need to regulate derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties (no actual regulatory scheme was proposed at the time). The request for comments, called the "Concept Release," stated that the growth of trade in derivatives had prompted the CFTC to re-examine its regulatory scheme.
The request for comments was opposed by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers. Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action.
In particular, these concerns focused on the risk that such discussion would increase legal uncertainty concerning swaps and other OTC derivative instruments and, thus, destabilize what had become a significant global financial market. They claimed potential turmoil created by the report and concerns about the imposition of new regulatory costs also might have stifled innovation and pushed transactions offshore.
As the financial crisis of 2008 gained momentum, newspapers began reporting on what might be some of its causes, including the adversarial relationship Greenspan, Rubin and Levitt had with Brooksley Born, with Greenspan leading the opposition, and how Born's recommendations were suppressed.
She is retired from Arnold & Porter and until recently had declined to comment on the unfolding crisis and her efforts to rein in the growing market for derivatives. "The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been." The disagreement has been described as a classic Washington turf war. She now laments the influence of Wall Street lobbyists on the process and the refusal of regulators to discuss even modest reforms.
I thought you had somehow misread the article!
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