What Will the CFTC Do?

Well, something.

The Commodity Futures Trading Commission was given broad powers – by last year’s Dodd-Frank Wall Street Reform and Consumer Protection Act – to restructure the futures and over-the-counter derivatives markets. And Gary Gensler, appointed to chair the commission in May of last year, is known to be something of an activist.

So far, however, there has been a lot of talk, a lot of hearings have been held, but little of consequence has been forthcoming.

That will change. We just don’t know when.

One of the key questions the CFTC has been grappling with is the implementation of position limits in futures trading, designed to put the clamps on speculation in agriculture, metals, and energy.

The proposal for new regulations in this area came about largely because of widespread public outcry over the role speculators played in the huge 2008 run-up in oil prices. Or, rather, the role they were perceived to have played. The leading causes of that price spike are by no means settled. (more)