Remarks of Chairman Gary Gensler, OTC Derivatives Reform, European Parliament, Economic and Monetary Affairs Committee, Brussels, Belgium

CFTC Speeches

March 22, 2011

Chairman Gary Gensler speaking in Brussels discusses Dodd-Frank and reiterates one of his favorite themes-the role that swaps allegedly playing in the financial meltdown of 2008.

"Though there were many causes to the crisis in 2008, it is clear that swaps played a central role. They added leverage to the financial system with more risk being backed up by less capital. U.S. taxpayers bailed out AIG with $180 billion when that company's ineffectively regulated $2 trillion swaps portfolio, managed from London and cancerously interconnected to other financial institutions, nearly brought down the financial system. These events demonstrate how swaps - initially developed to help manage and lower risk - can actually concentrate and heighten risk in the economy and to the public. Reform is needed now as much as it was in the immediate aftermath of the financial crisis."

Cross References

Dodd-Frank Act, Title VII