Senator Debbie Stabenow (D-MI), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today said the Committee must examine lessons from past market failures as it reauthorizes the Commodity Futures Trading Commission (CFTC) to avoid repeat crises like the 2008 near-collapse of global financial markets that left 8 million men and women without jobs. Today’s hearing, the first official hearing in the Committee’s CFTC reauthorization effort, featured testimony from a range of witnesses including market participants, end users, and regulators.
Speaking about the financial meltdown of 2008, Chairwoman Stabenow said, “We cannot forget that 8 million hard-working men and women lost their jobs. Pensions and retirement savings went up in smoke. A record wave of home foreclosures swept across the country, leaving devastated communities in its wake. There was no question that we needed serious market reform. As this Committee begins the process of reauthorizing the CFTC, we need to examine lessons from the past and consider ongoing challenges to the system. We want to make sure the agency that is responsible for protecting these markets has the authority, staff, and modern technology it needs to do its job.”
Chairwoman Stabenow cited the 2011 collapse of financial firm MF Global, and its loss of $1.2 billion in segregated customer funds, as a critical reminder of why it’s important to make sure the markets are transparent and functioning as intended. The company’s bankruptcy was the eighth largest in history and former MF Global executives are now facing civil charges in federal court.
“This Committee has been closely monitoring the MF Global case, where customer funds –money that rightly belonged to farmers, businesses, and individuals all across the country – went missing. We continue to focus on three goals: getting customers their money back, holding anyone engaged in wrongdoing accountable, and ensuring that proper customer protections are in place so that something like this doesn’t happen again,” Chairwoman Stabenow said.
Chairwoman Stabenow said in the coming weeks the Committee will announce additional hearings and hold a series of staff briefings to more closely examine the issues raised at the hearing today.
Witnesses at today’s hearing included The Honorable Kenneth E. Bentsen, Jr., President, Securities Industry and Financial Markets Association (SIFMA), Washington, DC; Mr. Terrence A. Duffy, Executive Chairman and President, CME Group, Chicago, Illinois; Mr. Adam Cooper (on behalf of Managed Funds Association (MFA)), Senior Managing Director & Chief Legal Officer, Citadel LLC, Chicago, IL; Mr. Dennis Kelleher, President & Chief Executive Officer, Better Markets, Washington, DC; Mr. Daniel J. Roth, President & Chief Executive Officer, National Futures Association (NFA), Chicago, IL; The Honorable Walter L. Lukken, President and Chief Executive Officer, Futures Industry Association (FIA), Washington, DC; Mr. Gene A. Guilford (on behalf of the Commodity Markets Oversight Coalition (CMOC)), National & Regional Policy Counsel, Connecticut Energy Marketers Association, Cromwell, CT; Mr. John M. Heck (on behalf of the National Grain & Feed Association (NGFA)), Vice President, The Scoular Company, Omaha, NE; Mr. Donald A. Russak (on behalf of the American Public Power Association (APPA), Executive Vice President and Chief Financial Officer, New York Power Authority, White Plains, NY; and, Mr. Jim Colby, Assistant Treasurer, Honeywell International, Morristown, NJ.
An archived webcast of the hearing can be accessed on the Senate Agriculture Committee’s website at http://ag.senate.gov.