President Clinton was forthright on ABC’s “This Week” yesterday when asked whether Larry Summers and Bob Rubin had given him bad advice about regulating derivatives (the advice was don’t regulate them.)
Clinton accepted responsibility, but he also said the advice was lousy:
“I think they were wrong and I think I was wrong to take” their advice, Clinton said on ABC’s “This Week” program.
Their argument was that derivatives didn’t need transparency because they were “expensive and sophisticated and only a handful of people will buy them and they don’t need any extra protection,” Clinton said. “The flaw in that argument was that first of all, sometimes people with a lot of money make stupid decisions and make it without transparency.”
“Even if less than 1 per cent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect 100 per cent of the investments,” Clinton said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.