October 18, 2011
Good morning. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission (CFTC) to consider proposed rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). I’d like to welcome members of the public, market participants and members of the media, as well as those listening to the meeting on the phone or watching the webcast.
I would like to thank Commissioners Dunn, Sommers, Chilton and O’Malia for their significant contributions to the rule-writing process. I also want to thank the CFTC’s hardworking staff – they are working day, night and weekends to complete these rules.
During today’s meeting, the first final rule that we will consider relates to position limits. A position limits regime in the commodity futures and swaps markets is a critical component of comprehensive regulatory reform of the derivatives markets.
The second final rule that we will consider today relates to core principles for derivative clearing organizations.
Lastly, we will consider staff recommendations providing further exemptive relief – consistent with the CFTC’s July 14th Exemptive Order – from certain provisions of Dodd-Frank’s Title VII requirements.
Importance of Reform
Today is our 20th meeting to implement Dodd-Frank rules. As we continue our work to complete the rulemaking process under Dodd-Frank, it is critical to remember why we are here in the first place. Though it has been three years since the financial crisis, we cannot forget the weaknesses that it exposed in both our financial system and our financial regulatory system.
We cannot forget the millions of Americans who had no connection to derivatives or other exotic financial contracts but still lost their jobs due to a poorly regulated industry. We cannot forget the millions more who lost their homes or whose homes are now worth less than their mortgages, in part because of how the financial system – including the unregulated swaps market – brought the economy to the edge of the cliff. The package of reforms included in the Dodd-Frank Act will help address the contributing factors to the 2008 crisis to protect those Americans. They are concrete measures that will bring transparency, openness and competition to the swaps markets while lowering the risk they pose to the American public.
There are those who might like to roll the Dodd-Frank Act’s reforms back and put us back in the same regulatory environment that preceded the crisis three years ago. But that regulatory system failed to protect the American public. We must not forget about the 8 million lost jobs – the majority of which were lost by people who have never used derivatives. We must not forget what the nation went through three years ago – and what the nation continues to recover from now.
Some have raised cost considerations about our rulemakings. We are going through those comments and they have been very helpful. But the greatest cost is having a public that is not protected from the risks of the swaps market and that does not get the benefits of transparent markets. That is why it is so essential that we finish implementing the Dodd-Frank reforms.
Before we hear from the staff on the rulemakings that we will consider today, I will recognize my fellow Commissioners for their opening statements.
Last Updated: October 18, 2011