From the 2009 News Archive
"The Warning:" Greenberger on Market Meltdown's Roots
Professor Michael Greenberger, who was the director of the Division of Trading and Markets at the U.S. Commodity Futures Trading Commission during the Clinton administration, has become a leading national voice in explaining the economic meltdown and in calling for new regulations that might help prevent similar occurrences in the future. On Oct. 20, Professor Greenberger appeared on PBS' Frontline special "The Warning,"
to discuss how regulators warned about derivatives’ dangers in the 1990s and became the enemies of some of the most powerful people in Washington.
"From what I could see in my observations of Alan Greenspan was that this was a man who was living almost in another era; that he was a total believer that the markets were self-correcting," said Prof. Greenberger in the documentary. "For example, the reason he thought that fraud shouldn't be the worry of regulators is, well, if somebody committed fraud in the business community, the rational workings of the market would be that people wouldn't do business with that person, and therefore they would die on the vine. And so the free market self-corrects and takes care of fraudulent actors."
View video clips of Prof. Greenberger from “The Warning.”
Read a transcript of Prof. Greenberger’s interview.
Over the past few years, Greenberger has testified numerous times on legislative reform proposals to bring a regulatory structure to the financial derivatives markets. Most recently, he testified before the U.S. House Committee on Agriculture hearing
on the discussion draft of the Derivatives Market Transparency and Accountability Act of 2009.
Prof. Greenberger teaches a seminar at the School of Law entitled "Futures, Options and Derivatives," and he is a Technical Expert to the United Nations Commission of Experts on Reform of the International Monetary and Financial System.