The media has been increasingly focused on a replacement for Commodities Future Trading Commission chairman Gary Gensler, whose term expired April of 2012. While up until several months ago the White House had made public its desire to renominate him for chairman, there has never been confirmation from Gensler whether he wanted to retain his post or step down. After I posted a piece encouraging President Obama to renominate Gensler I was contacted by a CFTC official who said that Chairman Gensler definitively did not want to be renominated. This appears to be the first public statement about Chairman Gensler’s intentions.
The Huffington Post’s Shahien Nasiripour brought news of the Obama Administration’s effort to run off the most effective financial regulator since Franklin Roosevelt signed the 1933 and 1934 Securities Acts into law:
My post last week about ditching the Volcker Rule and returning to some form of Glass-Steagall got a lot of positive responses. Back then I wrote that the Volcker Rule, which requires regulators to cleave risky trading for a bank’s house account from deposits insured by the FDIC, is immensely complex and that it will never be properly defined or enforced. Several regulators in the past week have agonized publicly over the need to get the rule “right.”
The October bankruptcy of MF Global has been the subject of several Congressional hearings recently. 38,000 MF Global clients lost $1.2 billion in the collapse, and numerous regulators, as well as the Department of Justice, have been trying to unravel hundreds of thousands of transactions to discover how this client money disappeared. Weeks later, it’s still unknown whether clients will have their funds returned or whether any laws were broken. What is certain, though, is that even after the passage of Dodd-Frank, our regulatory system has large supervisory gaps.