Yesterday, I pointed out that Gary Gensler, chairman of the Commodities Futures Trading Commission (an agency with responsibility for overseeing derivatives trades) – and one of the main people who blocked regulation of credit default swaps in the past – said that Congress’ proposed regulation of CDS leaves huge loopholes.
Bloomberg notes that Gensler testified:
What does it mean when even the guy who blocked regulation of CDS is saying that Congress’ proposed bill won’t do anything, and contains more holes than Swiss cheese?
I’ll give you a 4-word hint: regulatory capture of Congress.
Similarly, the SEC’s Henry Hu testified:
Frank’s proposal[‘s] “ambiguous” definition of risk management may leave a large number of corporations unregulated.