Good afternoon. Dean Berman I appreciate that kind introduction. I thank the George Washington University Center for Law, Economics and Finance for the invitation to speak today. I look forward to talking with you about the importance of this week.
The days of the opaque swaps market are ending. This Friday, October 12, we are shifting to a new era of transparency and commonsense rules of the road for the swaps market.
New Era - Swaps Market Reform Becomes a Reality
During the Great Depression, President Roosevelt and Congress put in place similar rules to bring transparency to the securities and futures markets, and protect investors from fraud, manipulation and other abuses.
These critical reforms of the 1930s are at the foundation of our strong capital markets and many decades of economic growth.
Swaps emerged in the 1980s to provide producers and merchants a means to lock in the price of commodities, interest rates and currency rates. Our economy benefits from a well-functioning swaps market, as it’s essential that companies have the ability to manage their risks.
The swaps marketplace, however, has lacked the necessary transparency to best benefit Main Street businesses and common-sense rules to protect the public.
Further, in 2008, swaps, and in particular credit default swaps, concentrated risk in financial institutions and contributed to the financial crisis, the worst economic crisis Americans have experienced since the Great Depression.
Eight million Americans lost their jobs, millions of families lost their homes, and small businesses across the country folded.