Stronger federal regulation of the $583 trillion derivatives market was one of the goals of Wall Street reform legislation adopted by the last Congress, in an effort to help reduce the careless trading that crippled the financial industry three years ago. But the new Republican-controlled House appears unwilling to finance the government agency charged with new powers to oversee derivatives.

 

Consequently, the agency, known as the Commodity Futures Trading Commission (CFTC), is preparing to ask the industry-backed National Futures Association to provide regulatory assistance.

 

Ananda Radhakrishnan, head of the CFTC’s clearinghouse division, said: “If we don’t get extra money, then I think the National Futures Association will have to bear the brunt of the examination” of firms that deal in derivatives.

 

Advocates for more oversight are hoping the news of the agency going to the industry for help will put pressure on Republicans to boost the CFTC’s budget.

-Noel Brinkerhoff

 

CFTC Likely To Tap Industry Body To Enforce Swaps Rules (by Jessica Holzer and Jacob Bunge, Dow Jones Newswires)