CFTC officials upset by budget cuts
Commodity Futures Trading Commission officials said late Thursday they are shocked that Congress cut the CFTC budget by $1 million in the fiscal year 2018 omnibus appropriations bill.
The bill reduces the CFTC to $249 million. The House has approved the bill and the Senate is expected to vote by Saturday.
CFTC Commissioner Rostin Behnam, the only Democrat on the commission, said in a statement, “The recently released congressional budget proposal unimaginably cuts the Commodity Futures Trading Commission’s funding level, leaving our nation’s critically important derivatives market and the general public increasingly vulnerable to systemic (and other) risk, and susceptible to fraud and manipulation.”
“Derivatives markets played a significant role in the 2008 financial crisis, and the Congress responded with Wall Street reform that requires the CFTC to oversee the approximately $600 trillion dollar previously unregulated over-the-counter swaps markets,” Behnam said. “While the CFTC has continuously met and exceeded the challenges of bringing these markets under our jurisdiction, its efforts have never been matched with requisite resources.”
“Growing cyber threats, domestically and internationally, examinations of our clearinghouses at home and abroad, and the rapid growth of the fintech (financial technology) industry present new, challenging issues that the CFTC will not have the resources to address in a timely and adequate manner. Simply put, the CFTC cannot responsibly innovate and meet the needs of rapidly evolving markets and market participants absent additional funding.
“I will continue to support Chairman (Christopher) Giancarlo’s budget request — and more — as this agency and its dedicated staff continue to do the best job they can to keep these global markets safe, transparent, and free from fraud and manipulation,” Benham said.
Giancarlo, the Republican chairman, asked for an increase. He did not issue a statement, but Erica Elliot Richardson, director of the CFTC’s public affairs office, said, “We are absolutely astounded by the decrease in the CFTC’s budget.”
Richardson told Politico that congressional leaders had given lip service to Giancarlo’s statements that the agency needed more money do its jobs.
“And yet shockingly, these priorities that frequently received lip service ultimately did not receive budgetary support,” she said. “Chairman Giancarlo takes this budget decrease incredibly personally and is currently meeting with our finance team to figure out a path forward for the agency.”
The CFTC comes under the jurisdiction of the Senate and House Agriculture committees.