Michael Greenberger

Michael Greenberger is a professor at the University of Maryland School of Law and a former division director at the U.S. Commodity Futures Trading Commission.

Recent Articles

Out of the Black Hole

Reining in the reckless market in over-the-counter derivatives.

Former Commodity Futures Trading Commission Chair Brooksley Born (AP Photo/Lisa Poole)
In September 2008, the United States faced what President Barack Obama called the "most profound economic emergency since the Great Depression." A mortgage crisis begat a credit crisis, shaking the entire financial system and sending the U.S. economy into what has been called the Great Recession. This crisis was caused in large part by the opaque and unregulated over-the-counter (OTC) derivatives, or "swaps," market, which was then estimated to have a value of almost $600 trillion, or 10 times the world's gross domestic product. Approximately one-tenth of the unregulated OTC market was made up of the now-infamous credit-default swaps, a product that Wall Street sold to "insure" sub-prime mortgage investments but which lacked regulation and, therefore, the capital required to support these "guarantees." When sub-prime investments failed, the "insurance" payments were triggered. Only the multitrillion-dollar U.S. taxpayer interventions to save Wall Street prevented a worldwide...