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SPEECHES & TESTIMONY

  • Closing Statement of Commissioner Sharon Bowen before the Market Risk Advisory Committee

    June 20, 2017

    Thank you to the Market Risk Advisory Committee (MRAC) members for another excellent meeting and for your continued service! And thank you to Acting Chairman Giancarlo, and the staff, for their support of this work. This has been our eighth meeting of the MRAC in little over two years, and I am so proud of the work that this committee has accomplished. The MRAC has tackled significant market risk and market structure issues including cybersecurity, market liquidity, portfolio compression, and inter-regulatory cooperation in central counterparty (CCP) resolution. And of course, the committee has spent a lot of time considering multiple aspects of CCP risk management, as typified by the outstanding set of recommendations presented at our November 2016 meeting.1 There is no doubt that MRAC has left an indelible impression on our markets.

    Being the sponsor of the MRAC has been one of the many joys I have had as a Commissioner at the Commodity Futures Trading Commission (CFTC). As the main cop on the beat for the complex and ubiquitous U.S. derivatives markets, the work of this agency is essential to the supporting the safety and soundness of our economy.

    It is because of the high value that I place on the work that we do here, that today I am announcing my intention that I will leave the Commission within the next few months, or perhaps sooner if another nominee is confirmed. Thus, unfortunately, this is my last MRAC meeting as its sponsor. Why am I doing this? The answer is simple: because, since the departure of former Chairman Massad, the work of this agency has been hampered by only having a two-person Commission when we should be a five-person Commission. In fact, we have not been a five-person Commission since the departure of Commissioner O’Malia in August 2014.

    Having just two Commissioners makes routine business difficult, but makes important policy decisions almost impossible. Without a full complement of commissioners to consider the far-reaching implications of our decisions, we are frozen in place while the markets we regulate are moving faster every day. This fact is intolerable to me. I came here to protect investors, by supporting prudent collateralization, promoting robust transparency, and ensuring vigorous enforcement in the derivatives markets; and I intend to continue to do all in my power to reach that goal. My hope is thus that by leaving early, I can inspire the key decision-makers to confirm four nominees as soon as possible.

    There will be other opportunities to express my admiration for this wonderful agency, including its dedicated staff, and its superb leader – Acting Chairman Giancarlo, so I will save that for a later date. But I will say that this is definitely a bittersweet decision. But as much as I relish my role as Commissioner, I believe that my leaving within the next few months is best for this agency. Thank you.

    1 “Recommendations of the CCP Risk Management Subcommittee of the Market Risk Advisory Committee,” voted on at the November 17, 2016 meeting of the MRAC, available at http://www.cftc.gov/About/CFTCCommittees/MarketRiskAdvisoryCommittee/mrac_meetings.

    Last Updated: June 20, 2017