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CFTC’s Gensler calls for “aggregated position limits” to curb excessive speculation

June 2, 2009

15:30 02Jun2009 RTRS-CFTC CHAIRMAN GENSLER BACKS U.S. REGULATION OF OTC DERIVATIVES MARKET, AGGREGATED POSITION LIMITS

15:30 02Jun2009 RTRS-GENSLER SAYS CFTC NEEDS “NEW AUTHORITIES” TO BRING TRANSPARENCY TO OTC DERIVATIVES MARKET

15:30 02Jun2009 RTRS-CFTC chief says US regulatory reform is urgent

 

    WASHINGTON, June 2 (Reuters) – The new chairman of the Commodity Futures Trading Commission told senators on Tuesday that broad U.S. regulatory reform is necessary and called for regulation of over-the-counter derivatives.

    In testimony to a Senate Appropriations subcommittee, CFTC Chairman Gary Gensler, on the job for a week, also endorsed aggregated position limits as a way to prevent excessive speculation.

    “The CFTC, along with the administration and other financial regulators, is committed to working with Congress on broad regulatory reform,” said Gensler. “This is particularly true for the markets that the CFTC currently regulates and the markets that may soon come under our regulation.”

    “Specifically, we must urgently move to regulate the over-the-counter derivatives market and address excessive speculation through aggregated position limits.”

    Gensler said President Barack Obama wanted action by the end of the year “to strengthen market integrity, lower risks and protect investors.”

    Market turmoil of last fall proved the need for stronger regulation, he said, and he said he would use every tool available to the CFTC.

    “I also look forward to working with Congress to establish new authorities to close gaps in our laws and bring much-needed transparency to the over-the-counter derivatives market,” he said.

    Gensler said CFTC should provide greater detail of non-commercial interest in its weekly Commitment of Traders report. With an eye to consistent application of position limits, the agency is reviewing all outstanding hedge exemptions to the limits, he said.

  (Reporting by Charles Abbott; Editing by Neil Stempleman)

  ((chuck.abbott@thomsonreuters.com; +1 202 898 8319; Reuters messaging: chuck.abbott.reuters.com@reuters.net)) Keywords: FINANCIAL DERIVATIVES/GENSLER

   

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 Tuesday, 02 June 2009 15:30:00RTRS [nWEQ001061] {EN}ENDS

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  • About John

    "John joined Reuters in 2008 as one of its first financial columnists, specialising in commodities and energy. While his main focus is on oil markets, he has written broadly on the emergence of commodities as an asset class, regulatory issues and macroeconomic themes. Before joining Reuters, John spent seven years as a senior analyst for Sempra Commodities (now part of JP Morgan) covering base metals and crude oil. Previously, he worked as an analyst on world trade, banking and financial regulation for consultancy Oxford Analytica."
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