The U.S. Commodity Futures Trading Commission and Securities and Exchange Commission must be given resources to carry out derivatives market oversight to avert a repeat of the 2008 credit crisis, Senator Debbie Stabenow said.
“I am concerned that if our agencies don’t have the tools they need, we are asking for a repeat of the crisis,” Stabenow, a Michigan Democrat who leads the Senate Agriculture Committee, said today in a remarks prepared for a hearing in Washington.
Budgets for the CFTC and the SEC, the agencies assigned to impose derivatives oversight under the Dodd-Frank Act, have been caught in a stalemate between Republicans aiming to cut spending and Democrats looking to pay for new rules. Stabenow’s statement aligns her with CFTC Chairman Gary Gensler and SEC Chairman Mary Schapiro, who are scheduled to testify at today’s hearing.
Lawmakers moved to increase oversight 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.
The CFTC’s $169 million budget for the current fiscal year is “far less that what is required to properly fulfill our significantly expanded mission,” Gensler said in his prepared remarks. President Barack Obama has requested an increase to $308 million for fiscal 2012 and users fees to help the CFTC carry out its responsibilities.
In her prepared remarks, Stabenow also pushed for the so-called end-user exemption, saying the regulators should follow Congress’s intent and exempt manufacturers and commercial end-users of derivatives from requirements to post margin.
“While Congress greatly expanded the authority of the SEC and the CFTC, that authority came with a warning -- they must not overreach,” she said.