U.S. Senator Saxby Chambliss (R-Ga.), Ranking Republican Member of the Senate Agriculture Committee, today received testimony during a Senate Agriculture Committee hearing on over-the-counter derivatives reform and systemic risk. U.S. Department of Treasury Secretary Timothy Geithner testified on the first panel about the Administration's proposal to further regulate derivatives. The Committee also heard from witnesses on the second panel that help service and facilitate derivative trading for both exchange and over-the-counter transactions.
"It is our responsibility to ensure that the Commodity Futures Trading Commission (CFTC) continues to effectively carry out its duties, including any new authorities and responsibilities Congress requires in the proposed financial regulatory reform legislation," said Sen. Chambliss. "To that end, the Department of Treasury recognized the important role of the CFTC in the proposal they submitted to Congress last August. I look forward to hearing from Secretary Geithner as to how exactly he envisions applying these new authorities."
In his opening remarks, Sen. Chambliss noted the Senate Agriculture Committee should be engaged in the development of any legislation addressing financial regulation. He also said a number of entities that had previously testified before the Senate Agriculture Committee in recent hearings had been critical of the Department of Treasury's proposal requiring end users to clear standardized transactions.
"Many end users have told me this would add considerable costs and would likely be passed along to consumers or perhaps prevent their businesses from using swaps as a risk management tool altogether," said. Sen. Chambliss. "These same entities were supportive of increased transparency both to the regulator and to the public and seem perfectly willing to endure any additional administrative burden. Clearly, the recent past has taught us the regulator needs more data in order to view and police the entire marketplace, but I am not sure the lesson of the recent market meltdown warrants increased costs to businesses that had little, if anything, to do with creating this situation."
This is the third hearing the Senate Agriculture Committee has held on the topic of financial regulatory reform this year.