Clearing
houses, which guarantee deals between two parties, have been at the
heart of regulatory efforts to make banks engaged in the vast and
fast-growing derivatives market shockproof.
But their increasing power has prompted some banks to warn
about clearing houses’ own ability to withstand market shocks and
defaults.
“It is a weak spot,” said Peter Hahn, a banking expert at
Cass Business School. “But it is nice to see that the issue [of a lack
of oversight] is being recognised and addressed when we are not in a
crisis.”
Mr Gensler’s plea for more money is a
standard regulator’s lament and one that he personally has made many
times over the past two years. But it comes as Congress must approve a budget
by October in a fractious showdown between the White House and
Republicans that could spark a government shutdown if not resolved.
President Obama has asked for $315m in funding for the CFTC
but it is far from clear that the Republicans, under pressure from the
Tea Party to clamp down on government spending, would agree to such a
figure. Mr Obama has also proposed a transaction fee on derivatives
trades to fund the agency.
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