June 27 (Bloomberg) -- The Barclays Plc settlements on interbank rates shows the need for the U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission to be “appropriately funded,” the Treasury Department’s No. 2 official said.
“When they’re not funded appropriately, there aren’t the right number of people policing these markets, which need, of course, to be policed,” Deputy Treasury Secretary Neal Wolin said today in an interview on CNBC television.
Barclays was fined 290 million pounds ($451.4 million) after admitting it submitted false London and euro interbank offered rates. The settlements were reached with the U.K.’s Financial Services Authority, the CFTC and the U.S. Department of Justice.
House Republicans are seeking to cut the CFTC’s fiscal 2013 budget by $25 million to $180 million, about 42 percent below President Barack Obama’s request. Senate Democrats are seeking to increase the budget of the main financial-markets regulators in spending plans that clash with House Republicans’ efforts to cut funds and rein in the Dodd-Frank Act. A Senate Appropriations subcommittee has proposed a 19 percent increase for the SEC.
Wolin also said so-called “living wills” are a piece of a bigger whole of the Dodd-Frank financial overhaul to ensure that banks can be unwound. Some of the largest banks, including JPMorgan Chase & Co. and Bank of America Corp., are required to submit to regulators by July 1 drafts of plans, known as living wills, of how they should be dismantled or rebuilt if they fail.
“The living will is not the total solution, but it is important that when these firms fail, that we have an understanding before the fact not when the crisis comes about how they can be pulled apart,” Wolin said.
Living will identify a bank’s strategy at the point of insolvency, business lines that are most important and how they relate to each other, and specify how much ready cash is needed to sustain operations.
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