Several Groups Voice Support of Wall Street Bill
R-Calf and NFU are among those supporting the bill.
Compiled by staff
Published: Apr 22, 2010
R-CALF USA Marketing Committee Chair Dennis Thornsberry called the Wall Street reform bill a significant step in the right direction to restore the principal purpose of the commodities futures market, which is to provide price discovery and reduce price risk for physical hedgers. "The reason this particular legislation holds promise is that it strengthens derivatives market oversight, transparency and stability, which should prohibit abusive and disruptive practices," Thornsberry said. "It also authorizes aggregate position limits across all markets."
R-CALF USA CEO Bill Bullard says cattle producers are vulnerable to any market distortions caused by beef packers that may not only participate in the futures market as physical hedgers, but as significant speculators as well.
National Farmers Union President Roger Johnson says this legislation will bring transparency, accountability and integrity to derivatives trading and will better regulate unfair manipulation of commodity markets.
The legislation introduced by Senator Blanche Lincoln, D-Ark., includes mandatory clearing and trading requirements and real-time reporting of derivatives trades that will close existing loopholes in the commodity futures markets. The legislation reins in financial players, like hedge funds and insurance companies that speculate in derivatives by creating centralized clearing and aggregate position limits. At the same time it would provide exemptions from clearing and exchange trading requirements for legitimate commercial hedgers such as farmers, processors, utilities and trucking companies.
Johnson points out, NFU members know the importance of dynamic and fair financial markets and are especially pleased with the sections of the bill that provide for aggregate position limits across all markets and appreciative of provisions that would deny any speculative interests the opportunity to exploit the end-user exemptions.
Permalink: Click here
Tagged: insurance
|