The one-year anniversary of Dodd-Frank is approaching, and with it a raft of new regulations are supposed to kick in. But the fate of financial reform remains in doubt.
The Commodity Futures Trading Commission (CFTC) has delayed for six months new requirements for derivatives originally scheduled to take effect July 16, The WSJ reports. "The move offers temporary relief to banks, companies and investors who have worried their use of derivatives ... could run afoul of regulation."
In a separate but related development, Vermont Senator Bernie Sanders is sponsoring the End Excessive Oil Speculation Now Act.
"The price of gas at the pump is outrageously high. Many people had thought this had something to do with supply and demand, that's not the case," Sen. Sanders tells me in the accompanying video. "It has everything to do with Wall Street speculation."
Rather than reinventing the wheel, the legislation, which has 5 co-sponsors, seeks to force the CFTC to impose regulations required by The Wall Street Reform and Consumer Protection Act.
"One of the reasons people are losing faith in the political process is even when we occasionally do something to represent working people, then that law is not implemented," Sen. Sanders says. "The reason for this legislation is to say [to the CFTC], 'you haven't done it, you were supposed to in mid-January. You're in violation of the law and we're going to make you do it.' We are going to have speculation limits."
Specifically, the legislation mandates the CFTC Chairman Gary Gensler take the following immediate actions to eliminate excessive oil speculation within two weeks:
- Establish speculative oil position limits equal to the position accountability levels that have been in place at the New York Mercantile Exchange since 2001.
- Establish margin requirements of 12 percent on speculative oil trading to require investors to back their bets with real capital.
- Classify as speculators each bank holding company, investment bank, or hedge fund engaged in proprietary oil trading; and
- Take any other action the Chairman of the Commission determines is necessary to eliminate excessive speculation.
The People vs. the Powerful
The practical question, of course, is whether there's any realistic chance a bill of this nature can make it through Congress.
"Do the American people want us to stand up to oil speculation? Of course," Senator Sanders declares. "Can we take on Wall Street effectively, which owns much of the U.S. Congress? That's another story."
The Independent Senator can be a polarizing figure. But at least on this issue, he's very much in step with the majority of Americans, judging by the response we've gotten to prior segments on this topic. (See below)
"I can tell you, in every district — whether it's a red or blue state — members of Congress are getting calls from constituents who are getting sick and tired of being ripped off at the pump," he says. "They want action. I hope occasionally, maybe we can do something for the people rather than for speculators and Wall Street."
For past coverage of this issue, see:
- CFTC Chairman Gary Gensler
- Senator Bernie Sanders
- supply and demand
- the American people
- Consumer Protection Act
- reinventing the wheel