Sunday, April 18, 2010

The Debts of the Spenders: Bill Clinton Regrets Repeal of Glass Steagall

Former US President Bill Clinton admitted to bad judgment in a tv interview. Specifically, Clinton blamed Robert Rubin and Larry Summers for deceiving him about the risks of unregulated derivatives products. Under Clinton, the Depression era Glass Steagall Act that separated banking activities from trading was dissolved.

Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act, named after the influential senators who were bought and paid for by the banking community. As for Robert Rubin, immediately after his term as Treasury Secretary expired, he was appointed head of Citigroup Travellers with a $1 billion/annual paycheck. Completely coincidental? You decide.

Clinton also said that Republicans who controlled Congress would have stopped him from trying to regulate derivatives. “I wish I had been caught trying,” Clinton said. “I mean, that was a mistake I made.”
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