WASHINGTON, D.C.— Cantrell Dumas, Director of Derivatives Policy, issued the following statement regarding the Commodity Futures Trading Commission’s (CFTC) upcoming open meeting on Monday, June 24 to address the finalization of the proposed Comparability Determinations orders for Japan, Mexico, the European Union, and the United Kingdom. In anticipation of this meeting, Better Markets has released a comprehensive fact sheet highlighting significant flaws in the CFTC’s previous approach.
“The CFTC’s decision to hold an open meeting to finalize its Comparability Determinations is a crucial moment for our financial stability. Much of the damage inflicted on the U.S. during the 2008 financial crash stemmed from the overseas activities of major American financial firms. These U.S.-based companies often situate their highest-risk operations abroad to evade domestic regulations. Consequently, when a major U.S. financial firm fails due to its overseas operations, the U.S. bears the brunt of the fallout. This is why the CFTC’s final determination orders are crucial.
“Our fact sheet points out major problems with the CFTC’s approach on comparability determinations and emphasizes the need for more transparency and a reliance on solid evidence. The CFTC’s current process is very hard to administer properly because it involves predicting the effects of different regulatory requirements. To do this correctly, the CFTC would need to clearly explain how it makes these predictions and apply the same method consistently in each case. Unfortunately, the CFTC has not done this. Instead, they make broad statements without providing enough facts, data, or detailed analysis to support their conclusions.”
“Voting to finalize these flawed determinations without addressing the highlighted concerns poses a serious risk to American consumers and the overall financial stability of the country. Inadequate regulatory standards for foreign operations could lead to a repeat of past financial crises, with American taxpayers bearing the costs. The CFTC must adopt a rigorous, transparent, and evidence-based approach to comparability determinations to protect the economic future and financial stability of the United States.”
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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
