Release Number 7966-19

July 10, 2019

CFTC Videocast Features Chairman Giancarlo Discussing Impact of Manufactured Credit Events in the Credit Derivatives Markets

Washington, DC – Today’s episode of CFTC Talks videocast (available now) addresses the concerns raised by three senior regulators earlier this summer regarding “opportunistic strategies,” or more commonly known as “manufactured credit events” in the credit derivatives markets.

This CFTC videocast highlights CFTC’s work in this critical area. Tune in today to hear an in-depth discussion featuring CFTC Chairman J. Christopher Giancarlo along with Division Directors James McDonald (Enforcement), Matthew Kulkin (Swap Dealer and Intermediary Oversight), Brian Bussey (Clearing and Risk), Amir Zaidi (Market Oversight) and senior analysts Christopher Goodenow (DMO), Frank Sensenbrenner (DCR), Greg Scopino (DSIO) and Michael Penick (Office of the Chief Economist), and Mel Gunewardena, CFTC Talks host and Chief Market Intelligence Officer to discuss the agency’s research, findings and concerns with these strategies.

On June 24th this year, CFTC Chairman Giancarlo, Securities and Exchange Commission Chairman Jay Clayton, and the U.K.’s Financial Conduct Authority Chief Executive Andrew Bailey issued a joint statement regarding their concerns in credit derivatives markets.

The three senior regulators said, “The continued pursuit of various opportunistic strategies in the credit derivatives markets, including but not limited to those that have been referred to as ‘manufactured credit events,’ may adversely affect the integrity, confidence and reputation of the credit derivatives markets, as well as markets more generally. These opportunistic strategies raise various issues under securities, derivatives, conduct and antifraud laws, as well as public policy concerns.”

The CFTC videocast provides additional background regarding these concerning strategies, the analysis undertaken, and specific views of the CFTC.

To listen and view the videocast, visit CFTC Talks. Subscribe to the podcast on iTunes by looking for CFTC Talks.