Gensler: Regulation doesn’t go far enough

Commodity Futures Trading Commission chairman Gary Gensler believes proposed regulation by the Obama administration to govern derivative markets could contain loopholes.

Gensler tells the Washington Post that the legislation leaves significant elements of the market out of the reach of regulators and undermine efforts to combat fraud.  Of particular concern to Gensler is:

•  certain types of derivatives used to bet on currencies could be exempt from regulators
• minor derivative traders would not have to meet the robust trading requirements envisioned by the legislation.

He does, however, support the legislation:

A top federal regulator has urged Congress to adopt tougher rules to govern betting in exotic financial instruments known as derivatives than the Obama administration has proposed, warning that the administration’s new vision of market regulation could contain loopholes.

One of the Obama administration’s top priorities in its revamp is to regulate both derivatives and firms that trade them. READ MORE.