Skip to comments.Why Obama Blinked On Merging The CFTC And The SEC
Posted on 06/18/2009 8:25:04 AM PDT by FromLori
Barack Obama's plan to overhaul the structure of financial regulation leaves in place the split between those regulators who supervise the trading of futures at the Commodities Futures Trading Commission and those who supervise stock trading at the Securities Trading Association. And while there may be good reasons to keep the commissions separate, mostly likely none of those informed the Obama administration's decision. Instead it was probably just cold politicial calculation.
Merging the commissions has long been a popular idea with reformers. It was proposed by Hank Paulson when he was Treasury Secretary, and it is supported by many who think that the divide between the New York centered functions at the SEC and the Chicago centered functions at the CFTC has created unhealthy regulatory gaps. Opponents of merging the commissions can argue that regulatory consolidation rarely leads to greater effeciency, that the Chicago-New York divide in the regulatory structure is beneficial because it reflects a real divide among trading cultures, that years of turf battles that follow regulatory mergers would be too much during while the financial crisis continues and that competition between regulators for jurisdiction leads to bettter regulation.
Obama needs support of Congressional and Senate Democrats to pass not only the financial regulatory reform, but also his climate and health care proposals. He mosst likely decided he couldn't risk angering the members of the agricultural committees by proposing taking away their authority. And so one of the most basic pieces of regulatory change was dropped for political considerations
(Excerpt) Read more at businessinsider.com ...
The democrat head of that committee has already written his version of the new regulations for commodities.
The House Agriculture Committee on Feb. 12 approved H.R. 977, the Derivatives Markets Transparency and Accountability Act of 2009. Although the legislation is a long way from becoming law, it is likely to have an important role in t Congressional efforts to limit speculation in the commodity futures markets and to strengthen regulation and oversight for both listed and over-the-counter derivatives trading.
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