On the recordMarch 10, 2010
I would like to relay a story that says a great deal about how the worst financial crisis since the Great Depression came to be. In 2006, a bond trader at Lehman Brothers struck up a conversation with one of the firm's college interns. When the trader asked this intern, who had not yet begun his senior year, what he was doing on his winter vacation, the young man replied that he would be trading derivatives for Lehman. That was a surprise, but the shock came when the intern said the firm had given him $150 million of its own money for this college student to bet on risky derivatives. Now, one college junior and his $150 million trading account did not bring the entire financial system close to collapse. But it is just this brand of recklessness that led to the need for multibillion-dollar bailouts and to the worst recession in decades, one that has left millions of Americans without a job. The losses that Lehman and other large financial firms racked up, trading on their own account and not on the behalf of investors, helped build the bonfire that nearly engulfed our entire financial system. That is why I have joined Senators Merkley, Kaufman, Sherrod Brown, and Shaheen to introduce the Protect our Recovery Through Oversight of Proprietary Trading Act, or PROP Trading Act.
