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CME Group CEO Craig Donohue on supporting efforts to deal with market manipulation and speculation and future M&A activity.
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We're back here live on the floor of the New York Mercantile Exchange continuing our broadcast this -- great chance to talk about energy prices and the Memorial Day weekend -- -- -- featured guest at our accident and I haven't.
Our is Craig Donahue he is the chief of all of them something CME group which is the parent the New York Mercantile Exchange.
Craig great being a -- have you join us here on the floor pleasure of first and foremost let's start with the news of the day those -- traders and their firms who were charged.
By the commodity futures.
I'm commission.
Manipulating.
The oil market just your response to that and just your work perhaps it was fifty billion -- Well obviously we could work well with the CDC and we certainly support all our press time.
Deal with the potential manipulation events or you know speculation type issues in the market.
Case in particular.
And not seeing is that you know obviously the CFTC has got a good job as part of their efforts to make sure that it you know I don't have regulation yeah.
You -- you used it a couple of.
Words there manipulation and speculation -- words you know the could have different definitions to betting on who you talk she's received some of the traders down here.
On the floor I would think going back 2000 statements like we saw on energy prices and now here we have -- -- to some extent.
Can we expect more action reviewed to try to curb either manipulation -- or speculation.
-- very happy that you ask that question because of course is a fundamental difference between manipulation which is prohibited.
-- speculation which is a valuable activity that contributes to liquidity and hedging and risk transfer and so that's a very important distinction.
That needs to be made we constantly.
Monitor our markets and work very closely with not only the CFTC -- other regulators as well.
To -- my -- margin requirements again example.
Well margin requirements are really intended to make sure that we have.
The ability to protect all participants in the clearing house because -- the guarantor to every buyer -- every seller so margin requirements are really not sat.
To include.
Trading behavior or prices in the market.
Expedia people who think that you're mr.
I killed being so -- Bob won't keep you well but.
I wanted to focus on also the Justice Department task force that it's put together to look into.
Potential broad speculation and manipulation whatever happened whatever you wanna call it what contacts if you had if any with that have north.
Well -- -- I wouldn't comment on that but you know again obviously you know that's a self -- later we would always worked very closely.
And collaborative -- when called upon with government on issues like manipulation or you know speculation.
I just want to comment briefly on the silver margin issue though which is that.
-- we set margins on the basis a number of different sort of volatility measures and so you've had.
You know significant increases to nearly 50% volatility and silver nearly 40%.
Roil markets during the time that we were raising margins and again you know we want to make sure that we can cover.
You know 99%.
Right price moves in -- market in order to be the guarantor.
To every buyer.
Seller I wanna ask you real quick before we wrap up right about all the exchange consolidation of course in New York Stock Exchange what's gonna happen -- are what -- are.
Whatever ends up happening.
You've already.
Did in that that -- right we -- -- is there any chance you'll be back in it and how do you view the competitive landscape given what else has gone.
Well we've really said that we're not likely to see major mergers and acquisitions activity at CME group were really excited about.
Our core business growth potential we are globalizing we see much higher -- rates in.
EM EA Asia Pacific electronic trading hours -- focused on extending ourselves into.
The index services area without our acquisition of Dow -- well -- into.
OTC clearing so.
That's our focus right now we're always gonna be opportunistic but and that is probably not really in our sights -- got.
All right thank you so much as Thanksgiving thank you certainly hear -- yeah you got a busy day medical we -- do aren't coming right.
