The federal regulator tasked with overseeing the markets for derivatives transactions issued a complaint Monday about the lack of new funding for his agency, faulting Congress and the Obama administration for leaving his request for more money out of their priorities in the spending bill passed last week.
In a statement posted to the website of the Commodity Futures Trading Commission site Monday, chairman Timothy Massad said the “failure to provide the CFTC even a modest increase in the fiscal year 2016 budget agreement sends a clear message that meaningful oversight of the derivatives markets, and the very types of products that exacerbated the global financial crisis, is not a priority.”
The agreement to keep the government open and funded through next September included $250 million in funding for the CFTC, the same as for fiscal year 2015 and $72 million below President Obama’s budget request.
Massad said that the funding “simply doesn’t match our vast responsibilities, especially as the markets we oversee have grown enormously in size, importance and technological complexity.”
The CFTC originally oversaw the derivatives contracts that farmers and ranchers used to hedge against changes in prices of the commodities they produced, to even out their income over time. Even though the CFTC is still funded with other agricultural programs and overseen by the congressional agricultural committees, its mandate has grown as the use of derivatives in finance has expanded. The 2010 Dodd-Frank financial reform law tasked the agency with overseeing huge new derivatives markets, and the agency has argued that it has not received the resources and manpower to do so effectively.
Massad noted that the Securities and Exchange Commission did receive a boost in funding in the omnibus spending bill, a comparison that suggests that the CFTC is less of a priority.
