A guest blogger at Simon Johnson’s Baseline Scenario laments
potent credit default swaps, a key ingredient to the [economic] crisis. The existence of this $60 trillion (now $45 trillion) notional value market, protecting and connecting counterparties across the system, led to a $180 billion taxpayer-funded bailout of AIG.
She notes that one of their champions was Bill Clinton’s Secretary of the Treasury, Larry Summers. And she reminds us that “during Larry Summers’s tenure [as president of] Harvard, certain swaps were put in place; then, according to Nina Munks of Vanity Fair, ‘for reasons no one can seem to explain, the university simply forgot to (or chose not to) cancel its swaps. The result was a $1 billion loss.’”
May 14th, 2010 at 5:25PM
[…] Right. With a mandate, Larry Summers, when he was president of Harvard, wouldn’t have been able to put together those clever credit swaps. […]
August 14th, 2013 at 10:40AM
[…] President Credit Swaps is once again on the move! […]