Reuters: Regulatory News: CFTC's Gensler to Chamber: we're on the same team

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CFTC's Gensler to Chamber: we're on the same team Mar 28th 2012, 19:39 Wed Mar 28, 2012 3:39pm EDT * Gensler says goals aligned with Chamber of Commerce's * Says both claim to want transparency in swaps markets * Chamber gave swaps regulation only a "C" grade By Alexandra Alper WASHINGTON, March 28 (Reuters) - The top U.S. futures regulator called out the Chamber of Commerce on Wednesday for claiming to support the Commodity Futures Trading Commission's goal of improved market transparency while criticizing the agency's work. The CFTC has come under fire from the Chamber of Commerce, the nation's largest lobbying group for corporations, as it develops rules to regulate the $700 trillion over-the-counter derivatives market. The reforms are called for in the 2010 Dodd-Frank law to overhaul financial oversight. Speaking at the Chamber's annual Capital Markets Summit, CFTC Chairman Gary Gensler said his agency was working toward many of the goals espoused by the Chamber, even though the group gave the Derivatives Regulation category a mediocre "C" in its first-ever financial regulatory report card a day earlier. "We both say we want more transparency, openness and competition in (futures and swaps) markets," Gensler said. "Sometimes when you do express concerns, we're actually not that far apart." But Gensler went on to express frustration with the "C" grade, which the Chamber had said meant "incomplete, too soon to evaluate potential consequences." "In reading yesterday's Chamber report card, I again asked myself: Why aren't the Chamber and the CFTC more aligned?" Calls for greater transparency in the swaps markets arose after widespread ignorance of the swaps exposures of troubled investment firms such as Lehman Brothers and mega-insurer AIG greatly aggravated the 2007-2009 crisis that led to taxpayer bailouts of Wall Street. The Chamber has expressed concern that broad swaps rules could increase costs for businesses that use derivatives to hedge everyday risk, like commodity price swings and interest rate fluctuations. Gensler said CFTC rules allow commercial end-users to transact over-the-counter swaps without posting cash reserves, just as the Chamber advocates. The CFTC chairman also said the agency had made an "unprecedented coordination effort" to work with international regulators on swaps rules, highlighting his recent trips to Basel and Brussels to discuss swaps market reforms. But he admitted the Chamber's score was not the first time he has received a "C". He got one in high school French as well, he told reporters. Gensler's address to the Chamber came as his agency turns toward completing some of the most important swaps rules mandated by the Dodd-Frank financial reform law. The CFTC has completed about 30 Dodd-Frank rules and has 20 more to go, including swap and swap dealer definitions and measures outlining capital and margin requirements - factors that will highlight who will have to comply with the potentially costly and onerous measures. Gensler said he hopes to improve his grade going forward. "Though I don't ever foresee an 'A' from the Chamber, one day you might even be glad that we helped bring the benefits of transparency to your three million members," he said. Link this Share this Digg this Email Reprints

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