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684. He Helped Clean Up the Last Crash. Does He See Another One Coming?
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The CFTC Years: Cleaning Up After 2008
At 22:34 · chapter starts 14:00
President Obama's post-2008 mandate was clear: stabilize, then reform. Gensler, working with Treasury's Tim Geithner, SEC Chair Mary Shapiro, and congressional leaders including Barney Frank and Chris Dodd, implemented 67 rules under Dodd-Frank to bring transparency and competition to the derivatives and swaps markets. Eighty-five percent passed on a bipartisan basis; nearly two-thirds were unanimous. Fifteen years later, they remain largely intact. The LIBOR scandal sits at the heart of this chapter: Gensler's CFTC discovered that 16 major global banks were simply lying about their daily borrowing rates — rigging the benchmark that underpinned millions of mortgages, auto loans, and student loans worldwide. Some were colluding. Gensler's team caught them and cleaned it up. He also zooms out to chart the evolution of financial engineering — from the invention of money itself, to double-entry bookkeeping, to Salomon Brothers' first interest rate swap in the 1980s, to securitization and credit default swaps — noting Paul Volcker's famously curmudgeonly view that the ATM was the only financial innovation that truly benefited the public.
Good market structure — fair access, real transparency, and strong anti-fraud rules — isn't just regulatory box-checking. It touches every American's mortgage, auto loan, and retirement. The rules of the game matter enormously.
Under Gensler's CFTC leadership, 67 post-financial-crisis rules were passed, with 85% receiving bipartisan support and nearly two-thirds adopted unanimously.
Major global banks were lying about their borrowing rates in the LIBOR market, rigging the benchmark that underpinned millions of mortgages and loans worldwide. Gensler's CFTC found them, named them, and cleaned it up.
Finance grew from 3% of US GDP in the 1950s to 8% today. But a larger financial sector hasn't delivered a more equal or better-functioning economy — it's delivered more wealth concentration and polarization.
The US finance sector has grown from about 3% of GDP in the 1950s to roughly 8% today, raising questions about whether a larger financial sector produces a better economy.
