Today, the Senate Banking Committee held another hearing regarding the oversight of the derivatives markets. Many large investors use the derivatives markets to speculate on oil prices resulting in unsustainable increases in fuel costs. Such speculation negatively impacts our jobs and our industry. See below for an excerpt of the strong opening statement made by Chairman Johnson (D-SD) regarding this important issue. The Chairman’s full statement is available here: http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=75aea17c-d90e-40e0-4809-0791b8d6bb74
“It is understandable that this high profile trading loss has caused many to renew their interest in Wall Street reform, but as Chairman I have never taken my eye off the ball. That is why we are here today continuing our oversight responsibilities.
“Much of the reaction to recent events has focused on other provisions of Wall Street reform, but what has gotten far less attention is the impact derivatives reform will most certainly have on reducing the likelihood that banks would want to engage in certain high risk, complex swap transactions in the first place. Higher margin and capital requirements for un-cleared swaps, increased clearing obligations, real time reporting requirements, and new anti-fraud and anti-manipulation authorities included in Wall Street reform will reduce market risk and improve the integrity of swap trading between large financial firms.”