April 21, 2010
By Gary Gensler
In September 1998, I travelled to Greenwich, Conn., to meet with Long-Term Capital Management, which was on the brink of failure. The highly leveraged hedge fund was dangerously interconnected to numerous financial institutions through its $1.2 trillion derivatives book. I was sent by the Treasury secretary to figure out the answers to two questions: What would the contagion from LTCM's failure mean for the broader economy? And was there anything the federal government should or could do?
The truth was that I did not have good answers for the secretary on either of these questions.
Ten years later, another Treasury ...
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Last Updated: April 21, 2010