Stephen Foley: Regulator needs help to tame financial Wild West

At Goldman Gensler was lobbying for precisely the lack of oversight he now seeks to enforce

US Outlook "There are more swaps people in this room than there are people in the entire CFTC," Gary Gensler told the 950-strong audience at the International Swaps and Derivatives Association meeting this week. "Go figure."

Mr Gensler, the chairman of the Commodities Futures Trading Commission, the derivatives regulator, was making a none-too-subtle plea for money from the dealing firms through an annual levy on top of his budget from Congress. The plea shouldn't fall on deaf ears.

The CFTC is hopelessly overburdened by the task of writing the detailed rules envisioned by Congress in its Wall Street reform law of 2010, a law that left so many gaps to fill that hundreds of new rules are still to be fleshed out and numerous deadlines have come and gone.

Some of the new regulations will come into force years behind schedule.

The CFTC is not alone with this challenge, but as the agency in charge of taming what was previously an unregulated Wild West of credit derivatives, its new burdens are most acute.

Of course it would be easy to deride the CFTC chairman for empire building. Which regulator doesn't want more staff, more power, more reason to be? The ambitious Mr Gensler might have been a shoo-in to take over from Tim Geithner as Treasury Secretary, were it not for the disqualificatory fact that he worked for 18 years at Goldman Sachs. His role as derivatives regulator is probably his best shot at a lasting legacy.

And there is no love loss between the regulator and the regulated here, precisely because at Goldman Mr Gensler was involved in lobbying for precisely the lack of oversight he now seeks to enforce.

Yet his case for a levy to boost the CFTC's annual budget by 50 per cent to $308m is strong. An underfunded regulator hurts the regulated. Speaker after speaker at the ISDA conference complained that uncertainty over new regulation had put them off going after new business and was hitting trading volumes. And Mr Gensler argued that hiring more staff would mean quicker responses from the CFTC to applications for trading permits and clarification of or waivers from specific regulations. These are the pro-industry things that would be cut first if the CFTC has to go into penny-pinching mode.

Having lost the battle to block new regulations, Republicans in Congress are on a perverse crusade to cut the CFTC's budget in the hope of preventing their implementation – but that would only sow more confusion and cost the industry more in lost business. Go figure.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence