Aug. 25 2013
A 1997 memo retrieved from the filing cabinet of investigative reporter Greg Palast shows the involvement of Lawrence Summers—Obama’s current favorite for chairman of the Federal Reserve—in a successful plan to help big bank CEOs “rip apart financial regulation across the planet.”
In the memo, future Treasury Secretary Timothy Geithner reminds “his boss to call the then most powerful CEOs on the planet and get them to order their lobbyist armies to march” to tear down financial safety regulations in all 156 nations party to the World Trade Organization.
“As we enter the end-game of the WTO financial services negotiations,” the memo begins, “I believe it would be a good idea for you to touch base with the CEOs….”
Regarding the purpose of the “end-game,” Palast writes:
The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.
Second, the banks wanted the right to play a new high-risk game: “derivatives trading.” JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets.”
But their work wouldn’t end there. Prudent financial controllers who wanted to protect their wealth rather than just get rich could simply move their investments to countries with safer banking laws. That would have to be changed. So the leaders of Goldman Sachs, Merrill Lynch, Bank of America, Citibank and Chase Manhattan sought to “eliminate controls on banks in every nation on the planet — in one single move.”