Cantwell Lauds Administration's Focus on Reforming Derivatives Regulation
Pledges to Work with White House to Prevent Wall Street Lobby From Weakening Long Overdue Reforms
WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA) today applauded President Barack Obama for his focus on the urgent need for financial regulatory reform and for taking a leadership role in putting together a comprehensive reform package. Cantwell has worked closely with the President’s economic team on her top reform priority: regulating the derivatives markets that spun out of control last year and greatly worsened the severity of the recession.
"My number-one concern all along has been transparency, and while the President’s proposal today is wide-ranging, my goal is to establish strong regulatory control over derivatives trading," Cantwell said. "After much hard work, we now have a strong, potentially historic proposal that can prevent the kind of economic melt-down that occurred last year."
The proposal unveiled by the President includes language requiring that all derivatives contracts be subject to regulation, all derivatives dealers be subject to supervision, and that empowers regulators to enforce rules against market manipulation and abuse.
The Administration has already come out in favor of very strong reforms for the derivatives market. Importantly, the administration has committed to three critical reforms that include fully regulating all derivatives transactions, requiring all standardized derivatives to be traded on fully regulated exchanges, and imposing aggregate position limits across all regulated markets to prevent any market player from amassing large positions that can harm the market.
Cantwell said she was pleased to see that the reform proposal would raise capital and liquidity requirements for financial institutions, with the most stringent requirements imposed on the largest and most interconnected firms. She also praised provisions in the proposal to enhance regulation of securitized markets and a particular focus on market transparency.
"President Obama has sent a clear message that he is serious about financial regulatory reform," Cantwell said. "The weakness of our regulatory system, especially derivatives regulation, played a major role in causing the recession that has claimed hundreds of thousands of jobs in my state and millions of jobs across the country. I will be an ally of the President in working to ensure that Wall Street interests do not weaken the regulatory reforms contained in this serious proposal. Where I find gaps in regulatory protections, I will work with my colleagues to close them. We must have a ‘never again!’ attitude about the financial meltdown of the past year."
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