Summit Notebook
Exclusive outtakes from industry leaders
CFTC’s Gensler explains the present with the past
Gary Gensler, chairman of the Commodity Futures Trading Commission, likes to go to the past — sometimes as far back as 1,000 years — to explain the financial situations of today.
For example, derivatives existed for 145 years, since the Civil War, and they became regulated in the 1930s, he said at a Reuters Global Financial Regulation Summit in explaining that derivatives need regulation.
If you only want to go back a couple hundred years, Gensler had this to say: “Somebody in the 19th century invented street lights, somebody invented stop signs, somebody invented traffic lights.”
And that probably raised costs just like regulation of derivatives may do. “Just like a street light protects you from dark and dangerous highways, we need something to protect us from the dark and dangerous market that right now is over-the-counter derivatives,” he said.
