Forgotten Lessons of Deregulation
Rolling Back Dodd-Frank’s Derivatives Rules Would Repeat
a Mistake that Led to the Financial Crisis
May
14, 2012 -
Although
debate continues over some of the root causes of the 2008 financial crisis,
there is little dispute that inadequate regulation of derivatives was a major
contributor. This new Public Citizen report chronicles the flawed arguments
that were used to deregulate derivatives during the Clinton administration and
how the decision to do so led to the worst economic crisis since the Great
Depression. But many have forgotten these recent lessons. At least nine bills
have been introduced in Congress that would erode the derivatives reforms in
the Dodd–Frank Wall Street Reform and Consumer
Protection Act of 2010—even as the nation is still recovering from the disaster
that unregulated derivatives caused in first place.