CFTC Commissioner Chilton Seeks Time, Resources and Regulatory Authority
Chilton speaks out in an exclusive interview with Farm Futures.
Arlan Suderman
Published: Sep 16, 2008
The Commodity Futures Trading Commission received praise for its sweeping report released late last week on commodity swap dealers and index traders. Congress requested the report to provide insight into regulating what it perceived to be excessive influence from the speculative funds in the commodity markets. Congress hoped that the report would define both the problem and the solution.
However, Commissioner Bart Chilton included dissenting comments in the report, arguing that, "I do not believe that the Commission's recommendations go far enough, and I have significant concerns relating to the underlying analysis on which the recommendations are based."
Commissioner Chilton expanded on his comments in an exclusive interview with Farm Futures this week. "We want speculators (in the markets)", stated Chilton. "The markets don't function without them, but the agency (CFTC) needs to have a good view into what they're doing and whether they're causing any non-economic influence on prices. The fundamentals should drive the markets by in large and we need to ensure that traders who never take delivery of the commodities aren't enmass dramatically driving prices beyond what the market will bear."
Chilton reiterated his concern that the commission is making recommendations to Congress before having what he considers quality data and adequate analysis. He'd prefer to see Congress provide sufficient time and resources for developing sound recommendations, combined with the authority to act on those recommendations. He acknowledges that "it's not acceptable to make the consumer wait months and months for action." Chilton went on to say that "we need to systematically look at the Over-The-Counter (OTC) market to see clearly where the influences are on the futures market. Otherwise, we're likely to see this happen again."
Farm Futures questioned Chilton about the potential timing of adding regulatory restrictions that might force additional liquidation at a time when the markets are already reeling. Chilton responded that, "You have to do it in a thoughtful way, which is why my preference is to give us (CFTC) authority to move forward with regulatory policy once we have a clearer view of what's going on."
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