US farm panel chief-Misguided idea to abolish CFTC
WASHINGTON (Reuters) - Abolition of the Commodity Futures Trading Commission is a misguided idea and will not resolve the turmoil in U.S. financial markets, said the chairman of the Senate Agriculture Committee on Sunday.
Treasury Secretary Henry Paulson was expected to propose reforms on Monday including merger of CFTC, which oversees futures markets, with the Securities and Exchange Commission, which regulates equities.
"The Commodity Futures Trading Commission is not responsible for the current state of financial and economic problems, and so it is misguided to think a part of the answer is abolishing the independent federal regulatory agency having oversight of our nation's critical futures markets," said Iowa Democrat Tom Harkin, the Senate Agriculture chairman.
"Merely attempting to paper over the crisis by little more than a change in the structure of the bureaucracy in Washington doesn't come to grips with the reality and the gravity of the situation."
The Senate and House Agriculture committees have jurisdiction over CFTC and could have an important voice in the agency's future.
Other committee leaders were not immediately available for comment. The Futures Industry Association, a trade group, said it would comment on Monday.
There have been discussions periodically on the best regulatory structure for U.S. markets. Proponents of an independent CFTC say the futures markets operate differently than stock markets and would be neglected in a merger with the larger SEC.
However, some groups within the futures industry say a single regulator could streamline U.S. standards and assure U.S. markets are competitive with the London exchanges, which have one regulatory agency for futures and equities. The FIA endorsed the idea of a merger when the issue was raised last year if it was part of adopting a "unified, principles-based approach to regulation."
That approach, used by the CFTC, is regarded within the industry as more flexible than rules-based regimes and more compatible with innovation.
(Reporting by Charles Abbott; Editing by Tom Hals)
