CFTC's Gensler Supports Inclusion Of Swaps In Volcker Rule Study

CFTC Chairman Gary Gensler said he supported the inclusion of swaps and derivatives in a new study on limits to proprietary trading in comments regarding the Volcker Rule. That rule, which would force banks to scale back proprietary-trading desks and curtail relationships with hedge funds and private-equity funds, is designed to discourage banks from engaging in risky trades with their own money.

Any risk that a banking entity could take on in the cash markets also could be expressed through swaps and derivatives. The inclusion of both prevents regulatory arbitrage, Gensler said in prepared remarks to the Financial Stability Oversight Council, a multi-agency group charged with preventing a repeat of the 2008 financial crisis and implementing Dodd-Frank regulations

Publication

Dow Jones

Date

January 18, 2011

Cross References (links may require a Cabinet subscription)

Dodd-Frank Act, Title VII, Sec. 619