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On the doubt -- congress debates the the best in the most effective ways to reform the financial industry did derivatives market a key to that discussion.
Go to Washington now let's releases today with another -- this -- exclusive right.
Well good afternoon -- good afternoon everybody derivatives -- we -- this -- out but they are what morphed into the financial markets weapons of mass destruction a year and a half ago.
And since he's taken his position as the head of the Commodity Futures Trading Commission Gary Gensler.
Has been trying to work on a plan that will prevent these complex financial instruments.
From wreaking Havoc again we welcome Gary Gensler the chairman of the CFTC thank you for being here to -- you know well.
Senator Chris -- working very hard on the bill financial regulation reform.
What do we have as far as protecting people from what derivatives did last time around because there's a push and a pull in Washington right now.
And certainly Wall -- weighing in they don't want too much regulation.
-- you're right about that list but what we're trying to do is lower risk and increase transparency.
And senators bill.
Largely does that but we'll see -- we have another couple steps in this path before it gets to the president.
And Wall Street wants to undercut their real reform when will the president get a bill on his table.
I'm an optimist I think he certainly should have a bill this summer on the latest before the election but we have to bring these transactions to transparent.
Venues like we have in the securities marketplace and Wall Street doesn't like.
That they don't like it but let's talk to viewers about.
What the problem is with Wall Street and derivatives they won't be able to freely trade these things because of high risk high reward for some of these very financial instruments.
That really blew up in the faces of the US taxpayer.
What derivatives are meant to lower risk in our economy their way for companies to hedge a risk of currency your interest -- The Wall Street -- the most way to make profits of course and so we need to bring them justice when you buy stock.
Into the transparent markets.
Now what do you expect senator Dodd will have what it comes to spelling out what kind of limits what kind of structure the derivatives will have to half.
Well I expect three things that dealers themselves have to be regulated -- have lower Rask.
Secondly we need to bring them.
To transparent markets like the New York Stock Exchange you think about but for derivatives and certainly something caught clearing -- is that have been around forever hundred years that.
Further lower risk in the system.
Well people don't like -- and there are people certainly at the Chicago Merc who haven't been thrilled about it.
Any kind of limit on a derivative trade makes some people who like to trade these things.
Very nervous so that the question is what would it look like would it be -- standard or would it be customized Wall Street would love to have -- -- Well we and administration think there it's still be customized derivatives but probably as much as three quarters of this marketplace is very.
Standard and those should be.
Everybody should be able to see them and see what the price says and see it on a real time.
-- before this -- -- interview -- you and I were talking and you said Wall Street doesn't like these limits but they're really good for the average individual and for investors.
That's a big disconnect.
Well it is but Wall Street has a profit motive and the American public has a different they want lower risk of more transparency so.
There's a disconnect there and and I was on Wall Street for eighteen years I was proud of those years but that's a different thing than serving the American.
And how well it you were at Goldman Sachs and of course Goldman has been in the cross hairs of a lot of people in and we we were just interviewing David and I were interviewing -- -- A week or two ago Michael Lewis is written the book the big short.
Saying that a lot of these big financial organizations.
-- the -- -- played with these things knowing full well that could explode in their faces and then the US taxpayer had to bail them out but looking forward there are many people who say.
That we already had enough regulation it just wasn't being meted out properly why do we need.
More regulation -- The system fail on this system terribly failed the American public and Wall Street Thomas drove us over the brink and the regulators -- failed.
This market's not regulated we need to bring some regulation it's like the wild west we can't leave it alone right now.
What makes you or or senator Chris -- or anybody else thinks that just because we slap -- on a bill like previous regulations were done.
That it'll work this time to rein in bad behavior.
Of course that it's hard to rein in bad behavior she say but this is a marketplace that hasn't had any regulation so let's put the regulation -- Give it some time to lower risk and increase what you can see in these markets now these aren't the only limits were talking about you've also been looking at limits on certain energy trades that become a little bit speculative -- what you perceive to be speculative.
Now you just had a hearing last Thursday on limiting traits for things like gold silver and copper.
Why do we need that.
Speculators are part of the marketplace and we recognize that for decades and America.
But sometimes they get so concentrated there there's there's so few of them that.
Even have a chance to control -- corner -- market that congress said we should set limits in markets.
So we're just looking in the energy space whether they reintroduced them.
And and that.
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