Mark P. Wetjen, President Barack Obama’s nominee to sit on the U.S. Commodity Futures Trading Commission, said it’s critical that the agency “hews closely” to the Dodd-Frank Act and avoids “unnecessary” costs on commercial and manufacturing firms.
Wetjen, a senior policy adviser to Senate Majority Leader Harry Reid, made the comments in testimony for his confirmation hearing today at the Senate Agriculture Committee. Wetjen was nominated to replace Michael Dunn, a Democrat, on the five- member CFTC.
“I think the more quickly the commission can act the better because it is going to provide some certainty to market participants and I know the market prefers that,” Wetjen told lawmakers. “But I think more important to them is making sure the rules are right.”
The CFTC and Securities and Exchange Commission are leading U.S. efforts to write new rules for the $601 trillion swaps market after largely unregulated trades helped fuel the 2008 credit crisis. The CFTC aims to finalize by the end of 2011 most of the new rules meant to reduce risk and boost transparency. The rules will govern trades conducted by firms including Goldman Sachs Group Inc. (GS), ConocoPhillips (COP) and Cargill Inc.
Wetjen’s nomination comes at a “crucial” time for the agency as commissioners look to make changes to more than 40 proposed rules and complete the regulations, said Senator Debbie Stabenow, the Michigan Democrat who leads the agriculture panel. Wetjen has been “parachuted” into the process, Senator Pat Roberts, a Kansas Republican, said at the hearing.
Wetjen’s nomination is supported by the U.S. Chamber of Commerce, which sent a letter on May 19 urging senators to confirm him to the agency.
“We are confident that Mark will exercise that sort of probing, and judicious, intellect at the CFTC,” R. Bruce Josten, executive vice president for government affairs at the Chamber, said in the letter. The chamber has lobbied to ensure that commercial and manufacturing “end users” such as MillerCoors are exempt from having to post margin in derivatives trades.
Wetjen told lawmakers that it is important for the CFTC to balance the need for new limits on speculation and the potential impact on liquidity that those restrictions might create.
“If liquidity dries up there are no swaps markets,” Wetjen said. The commission must be “careful and deliberative” as it considers implementing the limits. “I think that those two objectives can be met,” Wetjen said.
The so-called position limits proposal, issued in January, has been among the most contentious aspects of the agency’s Dodd-Frank rulemaking. The proposal spurred more than 13,000 comments from supporters such as Delta Air Lines Inc. (DAL) and opponents such as Barclays Capital.
Wetjen, 37, was born in Dubuque, Iowa, and spent weekends on his family’s farm listening to market reports on the price of corn, soybean and hogs, according to his prepared testimony.
Before working for Reid, Wetjen worked at the Lionel Swayer & Collins law firm in Nevada and represented clients in the mortgage-finance, gambling and energy industries. He was also a bartender for five months in 1997 and drove garbage and recycling trucks in Dubuque for four months in 1996.
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