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National Journal: What If Lehman Happened Today?

Authors: Michael Hirsh, and Stacy Kaper
December 1, 2011

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The euro crisis could trigger another American bank failure. Wall Street is better prepared this time, but U.S. regulators still haven't mapped the new financial universe, written rules for it, or ramped up enforcement.

Slight, balding, and a bit birdlike in appearance, Gary Gensler is no one's idea of a biblical David. But Gensler, chairman of the Commodity Futures Trading Commission, is fighting Goliath, and not just one Goliath—he's challenging several at once. The stakes couldn't be higher: If he doesn't win, it's possible that America could suffer a repeat of the 2008 crash.

There's the Wall Street lobby, which never stops trying to open giant loopholes in the still-evolving Dodd-Frank regulatory overhaul from 2010 that Gensler is trying to implement. There's the Republican-controlled House, which opposes Dodd-Frank, generally tries to make every loophole bigger, and (along with the Senate) recently sought to gut reform by slashing the CFTC's budget request by a third. Making the fight even lonelier for Gensler is the coming retirement of one of the law's chief champions, Rep. Barney Frank, D-Mass.

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