Inside Job Transcript - Final Version - 9.30.10 - Sony Pictures Classics

Inside Job transcript – Sony Pictures – September 2010 20
01:23:36.23
NARRATOR: Using derivatives, bankers could gamble on virtually anything. They could
bet on the rise or fall of oil prices, the bankruptcy of a company; even the weather. By
the late 1990s, derivatives were a 50-trillion-dollar unregulated market.
01:23:54.20 In 1998, someone tried to regulate them.
Brooksley Born graduated first in her class at Stanford Law School, and was the first
woman to edit a major law review. After running the derivatives practice at Arnold &
Porter, Born was appointed by President Clinton to chair the Commodity Futures Trading
Commission, which oversaw the derivatives market.
01:24:17.24
MICHAEL GREENBERGER: Brooksley Born asked me if I would come work with her.
Uh, we decided that this was a serious, potentially destabilizing market.
{MICHAEL GREENBERGER
FORMER DEPUTY DIRECTOR (1997-2000)
COMMODITY FUTURES TRADING COMMISSION}
NARRATOR: In May of 1998, the CFTC issued a proposal to regulate derivatives.
Clinton's Treasury Department had an immediate response.
01:24:38.08
MICHAEL GREENBERGER: I happened to go into Brooksley's office. And she was just
putting down the receiver on her telephone. And the blood had drained from her face.
And she looked at me, and said: That was Larry Summers. He had 13 bankers in his
office. He conveyed it in a very bullying fashion – sort of directing her to stop.
01:25:06.03
{SATYAJIT DAS
DERIVATIVES CONSULTANT
AUTHOR, TRADERS, GUNS & MONEY}
SATYAJIT DAS: The banks were now heavily reliant for earnings on these types of
activities. And that led to a titanic battle to prevent this set of instruments from being
regulated.
NARRATOR: Shortly after the phone call from Summers, Greenspan, Rubin, and SEC
Chairman Arthur Levitt issued a joint statement condemning Born, and recommending
legislation to keep derivatives unregulated.