Clinton owns up regulatory lapses, asks Obama to give America hope now

21 February 2009

Former US president Bill Clinton has admitted that a lack of regulation on derivatives during his eight years in office might have helped contribute to the nation's economic woes but he wants the new President Barack Obama to project a positive image of the US economy.

"I think we should have moved a little more aggressively on these derivatives," he told ABC's `Good Morning America' programme.

Clinton, however, called on President Obama to show more on what he promised America during his two years as a presidential candidate - `hope.'

Clinton attributed most of the regulatory lapses to overconfidence on the part of his administration on the functioning of financial institutions and on those who run them.

"Alan Greenspan (former Federal Reserve chairman) and others thought we shouldn't regulate, didn't need to regulate derivatives, because they would only be bought by very large, very wealthy, very sophisticated institutional buyers," said Clinton, adding, "The problem is if enough of them are bought, they become so much a part of the economy that if they crater, they still affect everybody else, anyway."

While giving Obama full marks for his first one month in office, Clinton, however, said the President's warnings about the economy sometimes make Democrats feel that the economic threats are so dire to overcome.