Senator Nelson: CFTC Must Implement New Rules Or Oust Chairman
U.S. Senator Bill Nelson (D-FL) has called on President Barack Obama
to oust a top Washington regulator if there are continued delays of new
trading rules that could curb the rise in gas prices.
Nelson, in a letter to the White House, said Gary Gensler, chairman of the
Commodity Futures Trading Commission, should be held accountable over
the commission’s delays in imposing new congressionally mandated
restrictions on speculative trading of futures contracts, including for
oil and gas.
“The CFTC was supposed to implement
the new rules by January 2011,” Nelson wrote in his letter. “But
intense pressure from industry lobbyists is delaying reform. … If
Chairman Gensler doesn’t act soon to implement rules that will cut down
on speculation in the oil futures markets, then you should consider not
reappointing him.”
Gensler, a former Goldman
Sachs executive, serves as chairman of the CFTC at least until later
this month when his term expires. A law allows him to remain on the job
through next January. Among the commission’s duties is to act as an
overseer of speculators who trade in oil futures and other commodities.
There is growing evidence to show these speculators are bidding up
the price of oil and flipping futures contracts for a quick profit, much
like speculators who bought and resold condominiums during the real
estate bubble. Based on one recent Wall Street analysis, 63 cents of
every gallon of gasoline is due to speculation. The share of the oil
futures market controlled by speculators has more than doubled over the
past 10 years. And, during that same time, gas has gone from $1.15 a
gallon to an average of $3.97 a gallon.
In order to diminish excessive speculation, Congress passed
legislation two years ago directing the CFTC to draft new rules
governing commodities trading. But the five-member commission, under
Gensler, has been under pressure from the investment banking industry
seeking to delay or derail the rules.