WASHINGTON -- House Agriculture Committee Chairman Collin Peterson, D-Minn., says he is determined to keep the Commodity Futures Trading Commission an independent agency under the jurisdiction of the agriculture committees and that he is planning a major commodity futures regulation bill in January.
In an interview after a hearing, Peterson said complaints he has received that President-elect Obama's transition
team at the CFTC has "no background" in CFTC matters have made him more convinced to fight any merger of the CFTC with the Securities and Exchange Commission. Peterson said if SEC employees were in charge of agricultural commodity futures, they would not be able to handle problems such as this summer's lack of convergence between wheat futures prices and the sale of the grain when the futures contracts expire. Peterson also said he thinks Congress will resist proposals to merge financial regulators because the Homeland Security Department, which combined divisions from several other agencies, has proven so problematic.
Making it work
"We're in a crisis. What need to make what we have work," Peterson said.
ADVERTISEMENT
After a hearing on the role of credit derivatives in the U.S. economy, Peterson said in the interview that he plans to base his bill on his commodity speculation measure that passed the House this year, but put in a "mandate" that the now-unregulated over-the-counter credit default swaps be cleared through regulated futures exchanges. But Peterson said his bill "would not go as far as" the bill Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, introduced in November as a marker for legislation next year. The Senate never took up the House-passed measure.
A range of critics have said that speculators caused the price of oil and other commodities to rise too fast last summer and then to plummet. Since the financial crisis occurred, other critics have said there should be more regulation of credit default swaps, which are arrangements between individuals and businesses to insure payment of debts and to cover other complicated business deals.
Peterson, who managed to get the 2008 farm bill passed over a presidential veto, said he would treat the futures bill "like the farm bill -- not as something nice to do but something we have to get done." But Peterson also said the bill may include provisions that mean the Financial Services Committee and the Energy and Commerce Committee may claim jurisdiction over portions of it.
At the hearing, several futures industry leaders said they would support clearing most credit derivatives on regulated exchanges, but that there should be an exemption so that customized credit default swaps still could be created to deal with complicated business deals.
