London, 3 November 2009

The following speech was given by CFTC Chairman Gary Gensler.  Good afternoon.  It is a pleasure to be with you today.  I’d like to thank the International Emissions Trading Association (IETA) for inviting me to speak on the need for comprehensive reform of over-the-counter derivative markets as well as appropriate regulation of carbon emissions trading markets.

The Commodity Futures Trading Commission’s (CFTC) predecessor was established in response to an earlier crisis in the 1930s to oversee the markets for commodities and risk management contracts.  With subsequent market developments, we now regulate
the markets for derivatives, ranging from interest rates, currencies, wheat, energy, other commodities and even emissions allowances.  Some of these contracts, called futures, are traded on regulated, transparent exchanges.  Other derivatives, called swaps or over-the-counter derivatives, are traded between two parties and currently are not subject to regulation.

The CFTC and the Administration are currently working with Congress to bring comprehensive regulation to over-the-counter derivatives.  Though there are certainly many causes of our current financial crisis, I think most would agree that the unregulated over-the-counter derivatives marketplace played a central role.  The time has come for comprehensive regulation.

Click on the PDF to read the full presentation by CFTC Chairman Gary Gensler.

Remarks of Chairman Gary Gensler, CFTC’s Role in Cap-and-Trade, IETA 2009 Fall Symposium:

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IETA Gensler

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