The US Senate confirmed Gary G. Gensler's nomination as chairman of the US Commodity Future Trading Commission on May 19 by an 88-6 vote.
It took the action five days after Sen. Maria E. Cantwell (D-Wash.) removed her hold on the Obama administration's selection. She continued to express concern about Gensler's opposition to regulating derivatives when he was US Treasury undersecretary in 1998, but added that she would not block his confirmation since US Treasury Secretary Timothy F. Geithner said he would seek much stronger controls.
"The Treasury Department's announcement was not a piece of legislation but rather a policy outline. It is now up to us in Congress to turn these concepts into law. I am committed to working with the Senate leadership to ensure that the resulting legislation closes the loopholes that have made it easy for speculators to get around well-intentioned but poorly designed controls," she said on May 14.
Gensler will take charge of an agency which came under heavy fire when crude oil prices soared to record levels in 2008's first six months despite apparently adequate supplies. Critics charged that speculators took big financial positions to drive prices higher and cashed out during the summer, causing prices to plunge before impacts from the growing economic recession started to reduce demand in October.
The CFTC also has been preparing to regulate trading of carbon credits as Congress debates a cap-and-trade program to address global climate change.
Senate Agriculture Committee Chairman Thomas R. Harkin (D-Iowa) said following the vote that he hoped Gensler would reform regulation of trading in futures and other derivative contracts. "With our current economic crisis, it is painfully clear that our nation's financial system requires a much stronger and more comprehensive regulatory scheme, and it is important that we have a strong leader at the CFTC," he indicated.
"Last week, the administration outlined a proposal for regulatory reform for over-the-counter derivatives. This was a step in the right direction, but there is still more that needs to be addressed. Earlier this year, I introduced legislation to bring these types of financial transactions onto regulated exchanges in order to add openness, transparency, and integrity in futures trading to help rebuild our financial system," Harkin continued.
He said that he planned to move forward with this legislation, was scheduling a hearing on the subject in the next month, and would call Gensler as the lead witness.
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