Congressional efforts to reduce the federal deficit shouldn’t restrict funding for the Commodity Futures Trading Commission, which needs more money to avert a repeat of the credit crisis, CFTC Chairman Gary Gensler said.
“We recognize that the budget deficit presents significant challenges to Congress and the American public,” Gensler said today in remarks prepared for a House Appropriations Committee hearing in Washington. “But we cannot forget that the 2008 financial crisis was very real.”
The CFTC budget has been frozen at its fiscal 2010 level -- along with those of other federal agencies -- by a stalemate between Republicans aiming to cut spending and Democrats looking to fund implementation of the Dodd-Frank Act. The CFTC and the Securities and Exchange Commission are responsible for expanding oversight of derivatives under the regulatory overhaul.
Lawmakers moved to increase regulation of the derivatives market after largely unregulated trades helped spark the worst financial crisis since the Great Depression. Dodd-Frank, enacted in July, aims to reduce risk and boost transparency by having most swaps traded on exchanges and guaranteed by clearinghouses.
President Barack Obama has requested an increase to $308 million for fiscal 2012 and proposed user fees to help the CFTC carry out its responsibilities. The agency is currently operating under its $169 million budget for fiscal 2010 while the $261 million request for is tied up in congressional negotiations.
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