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Chairwoman Stabenow announces plans for CFTC reauthorization, encourages finalizing Dodd-Frank rules
Story Date: 2/28/2013
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Source: PRESS RELEASE, 2/27/13
Senator Debbie Stabenow (D-MI), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today announced that she and Ranking Member Sen. Thad Cochran (R-MS) will begin the process of reauthorizing the Commodity Futures Trading Commission later this year. She also encouraged CFTC officials to finalize rules and finish implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act. Stabenow said both efforts would help create transparency and ensure markets are safe for trading and free of manipulation.
“Reauthorization is an opportunity to critically examine these markets and weigh policy changes that would help protect markets and the public,” Chairwoman Stabenow said at a Committee hearing conducting CFTC oversight. “These markets, whether for physical goods or financial products, must be orderly, transparent, competitive and safe for trading. We must have markets that allow farmers and business owners to manage risk without fear. That also means our ‘cops on the beat’ must have the resources they need to do their jobs.”
Chairwoman Stabenow and Ranking Member Cochran will release a joint letter in the coming days that will invite public input on reauthorization.
“These comments and recommendations will become part of the public conversation,” Chairwoman Stabenow said. “We would like to hear from the public on a couple of fronts: concerns with commodity market oversight generally and on the need for additional customer protections in light of the failures at MF Global and Peregrine Financial. Senator Cochran and I will work together closely on this issue. The process will be open and bipartisan while the product will be consensus-driven.”
Stabenow further pressed for the CFTC to finalize implementation of the Wall Street Reform and Consumer Protection Act, citing the collapses of MF Global and Peregrine, as well as the possibility of a repeat of the 2008 financial meltdown that cost nearly 8 million jobs, as reasons for strengthening customer protections.
“While the CFTC is further ahead than other agencies in implementing this law, there are still many outstanding issues to address, including a final rule on Swaps Execution Facilities, cross-border guidance, and compliance with the law,” she said. “I continue to be concerned that if the agency doesn’t have the tools it needs implement reform and oversee these markets, we are asking for a repeat of the crisis that cost us so many jobs.”
Chairman Gary Gensler, of the CFTC, testified before the Committee. An archived webcast of the hearing can be accessed on the Senate Agriculture Committee’s website at http://ag.senate.gov. Below are Chairwoman Stabenow’s opening remarks, as prepared for delivery.
Opening Statement of Chairwoman Debbie Stabenow (D-MI)
Oversight of the Commodity Futures Trading Commission
Welcome to this oversight hearing of the Commodity Futures Trading Commission. Thank you to Chairman Gensler for being here. This hearing will look at the agency’s agenda for this year, its implementation of Wall Street reform, its efforts to protect customers since the failures of MF Global and Peregrine, and to lay out this Committee’s plans for the agency’s 2013 reauthorization.
The CFTC is responsible for making sure derivatives markets are safe for trading and free of manipulation. American farmers and co-ops, manufacturers, utilities, and businesses rely on these markets to manage their risk and shield consumers from price swings. In fact, more than 38 million Americans work at companies that use derivatives – a number that underscores the importance of the agency to our daily lives.
That is why the Wall Street Reform and Consumer Protection Act is so important. While the CFTC is further ahead than other agencies in implementing this law, there are still many outstanding issues to address, including a final rule on Swaps Execution Facilities, cross-border guidance, and compliance with the law. It is also important to get a progress report on the issues surrounding the failure of MF Global and Peregrine Financial Group.
I would like to make a couple of points on cross-border issues. It is imperative that the agency uses its authority on extraterritoriality wisely. It is critical that we prioritize safety and soundness, particularly in such interconnected markets, but the CFTC must also take into consideration the importance of global harmonization and international cooperation and find creative ways to merge these goals. A failure to meet this objective invites Congressional action, or worse, global retaliation.
With so many critical issues before the agency, I also want to acknowledge the serious budget constraints that the CFTC is experiencing – including the uncertainty of sequestration. I continue to be concerned that if the agency doesn’t have the tools it needs to implement reform and oversee these markets, we are asking for a repeat of the crisis that cost us so many jobs.
Finally, we will begin the discussion about reauthorization of the CFTC today. Senator Cochran and I will work together closely on this issue. The process will be open and bipartisan with any product being consensus-driven.
To that end, Senator Cochran and I will release a joint letter in the coming days that will invite the public’s input by May 1. These comments and recommendations will become part of the public conversation, particularly about commodity market oversight generally and the need for additional customer protections in the wake of failures at MF Global and Peregrine Financial.
These markets, whether for physical goods or financial products, must be orderly, transparent, competitive, and safe for trading. We must have markets that allow farmers, small businesses, and others to manage risk without fear. That also means we need our “cops on the beat” to have the resources they need to do their jobs.
Thank you, Chairman Gensler, for being here today. I look forward to working with you and the rest of the Commission this year on these important issues. I now turn to the Ranking Member for his comments.
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