FACTBOX-Quotes from CFTC's position limit hearings
WASHINGTON, July 29 |
WASHINGTON, July 29 (Reuters) - The Commodity Futures Trading Commission commenced hearings this week in a move to toughen oversight after excessive speculation was blamed for skyrocketing energy and commodity prices last year.
The agency has proposed regulations that would set position limits, capping the amount of contracts an investor can hold. Here are some quotes from key players in the discussion:
CALLS FOR CHANGE
"Anybody who thinks that last fall is just a distant memory ... just think about all the Americans that are out of work today because of the excesses of Wall Street. I just feel we have to do this, working with Congress."
-- Gary Gensler, CFTC chairman
"We and our consumers cannot continue down the same path. It is time for a concerted effort toward meaningful reform to restore stability and confidence in these markets."
-- Sean Cota, on behalf of the Petroleum Marketers Association of America
Extreme volatility in oil prices "has made it impossible to undertake necessary corporate planning and has been devastating to our industry."
-- Ben Hirst, senior vice president and general counsel for Delta Air Lines Inc (DAL.N), the world's biggest carrier
WHAT REGULATORS ARE SAYING
"I believe we must seriously consider setting strict position limits in the energy markets. Every option must be on the table."
"While I believe that we should maintain exemptions for bona fide hedgers, I am concerned that granting exemptions for financial risk management can defeat the effectiveness of position limits."
"I don't see a Goldman Sachs swap desk or J.P. Morgan swap desk as a passive mechanic. It is a highly sophisticated risk business and it's an important component of our financial market."
"Whatever manner the agency proceeds, 'going slow' is not an option."
-- Bart Chilton, CFTC commissioner
WHAT THE EXCHANGES ARE SAYING
"While well intentioned, these measures often fail to achieve their desired objectives or, worse yet, lead to unintended consequences ...that would otherwise be discovered in properly operating markets."
-- Jeffrey Sprecher, chief executive of Intercontinental Exchange (ICE.N)
"We're trying to address the perception issues out there even though I think it's been abundantly clear that there is no evidence" of speculation driving up oil prices.
-- Craig Donohue, head of Chicago Mercantile Exchange
WHAT THE TRADERS ARE SAYING
The hearing "seems to me to be a euphemism for what we can do to make sure that crude doesn't trade over $140 again. Oil prices were indeed remarkably high last year. But such high prices were also found in steel, coal, and cobalt, and they don't trade on the futures markets at all."
-- Henry Jarecki, chairman of Gresham Investment Management.
"We believe that eliminating or limiting swap dealer hedge exemptions not only will not address the 'swap loophole' but actually will have several negative consequences."
-- Donald Casturo, managing director of Goldman Sachs Group Inc (GS.N)
"Those transactions (swaps) are vital to the counterparties entering into them for risk-management or investment purposes, both of which are legitimate and important objectives."
-- Blythe Masters, managing director and head of the global commodities group at JPMorgan Chase & Co (JPM.N)
WHERE THE DISCUSSIONS ARE LEANING
"We are not price setters ... but we are about making sure markets are fair and orderly and work for the American public."
"If we were to move forward with proposed rules, I would hope to do so in the fall."
"There seemed, at least, that the commission is hearing support. I think it's more a question of how, than whether."
(Compiled by Jasmin Melvin; Editing by David Gregorio)
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