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CFTC Chairman Gary Gensler comments on risks in the financial system and in the Volcker Rule.
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Gradually thank you very much now we have our big interview markets now with the -- the Volcker Rule on the agenda at the commodities futures.
-- trading commission today at their roundtable this morning but observers also.
Listening very closely for -- economy hints about what the commission's plans are in the investigation into JPMorgan and the trading -- there so with all that in mind.
Peter Barnes in DC with the chairman.
Of the CFTC.
Peter.
That's right got a lawyer Gary Gensler right now who is chairing this roundtable today and chairman Gensler thanks for joining Fox Business.
I know that you.
Can't don't want to talk about the JPMorgan Chase investigation but it is the big elephant in the room can you give us some kind of update.
On where the investigation stands -- this two billion dollar trading loss.
Well.
Where market regulator that ever -- credit.
Derivative products these these indices but have your right.
I can't comment about an investigation because it might compromise an investigation but I do think it's a reminder again -- risk.
Emanating at a London can crash back on our sure as we saw this in 2000 -- night AIG was run out of line and we saw it.
Again in these last few weeks where.
Risk run -- -- London came crashing back to reminding the American public we need to get these reforms done.
One of the big issues in this discussion of the Volcker Rule is hedging an aggregate position.
At a financial institution.
JPMorgan was hedging a portfolio.
What's the difference and how -- you resolve -- -- it there there may be a great difference in just those two words congress says.
That we need to ban proprietary trading to lower the risk to the taxpayers but also allow hedging.
Aggregate positions.
But this work portfolio hedging can mean a lot of things that different people and it can sometimes.
More for mutate and today -- trying to.
Mega bad boy and will markets go up -- down south.
We as regulators have to sort through this it's not easy but why its relevance the American public is still lower risk of the financial -- What what what do you think or what would you like to see the final in the final rule would there be.
Restrictions on so called portfolio hedging.
Well I think congress are expect -- -- that we have to -- allow.
To hedge aggregate positions but I think it's gotta be specifically.
Tied to those positions.
And have it set it up as a separate unit with a separate profits and loss separate compensation.
The managers are probably doing something very different than hedging.
I've been sitting through the morning around table here we have consumer advocates.
Academics people from banks and and -- Wall Street firms.
This sounds impossible.
To do to come up -- this final rule.
How do you think it's all going to be settled.
Well I I think this is one of the more challenging -- but I think it's still -- this is part of our democracy at work.
It's esoteric.
But I think we we can get this done but we've got to get it done and we've got -- from Europe that maybe crashing to our shores as well with the European debt crisis I think it's time to get it done and we'll do that in the next step few months.
Gary Gensler of the SC FTC's chairman thanks for joining us today and when you're ready to dish on the JPMorgan investigation.
Call us our stuff I got it got well back DO contrived Peter absolutely and -- to be as well thank you very much new -- report.
