Financial Regulatory Forum

INTERVIEW-CME’s CEO is not anxious about reform delay

March 11, 2010

   By Ann Saphir and Jonathan Spicer
   BOCA RATON, Florida, March 10 (Reuters) – Craig Donohue, head of the world’s biggest futures exchange operator, said on Wednesday the growing number of months that regulators and politicians are devoting to revamping financial markets is a positive sign — not something to grow anxious over.
   “There’s value if the additional time is resulting in the opportunity to more carefully think through what type of legislation is appropriate” to deal with gaps in regulation that may have contributed to the financial crisis, Donohue, CME Group Inc’s <CME.O> chief executive, told Reuters.
   “That’s a positive thing,” he said on the sidelines of the Futures Industry Association conference in Boca Raton.
   Some 18 months after the mortgage-inspired financial meltdown that sparked a global recession, the United States, the European Union and others are still debating and crafting rules meant to avoid a repeat of the crisis.
   Donohue said he welcomes some of the reform proposals being considered. CME Group could benefit as more over-the-counter products are forced through clearinghouses and exchanges, but could suffer if regulators restrict bank proprietary trading or impose steep position limits in commodities markets.
   A revised bill on financial regulation is expected very soon from the U.S. Senate’s Banking Committee. [ID:nN10137492]
   The bill would tighten bank and capital market oversight and is expected to include measures for consumer protection, systemic risk, and an over-the-counter derivatives crackdown — the issue central to CME Group, which recently launched a credit default swap clearinghouse and wants to clear more swaps.
   “We’re expecting the Senate bill reasonably shortly,” Donohue said. “The process is definitely evolving, but I’m not unhappy with the fact that there’s been time to actually meet with legislators.”
   The European Commission is expected to publish a draft law on derivatives clearing by July.
   “It’s hard to judge” whether the political will to reform financial markets is waning, the CEO added. “Certainly there is a clear focus on the legislation.” (Reporting by Ann Saphir and Jonathan Spicer; Editing by Gary Hill) ((jonathan.spicer@thomsonreuters.com; +1-646-223-6253; Reuters Messaging: jonathan.spicer.reuters.com@reuters.net))
   Keywords: CMEGROUP/ 
  
Thursday, 11 March 2010 01:08:40RTRS [nN10178974] {C}ENDS

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