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Good morning Chairman Lincoln, Ranking Member Chambliss and members of the Committee. Thank you for inviting me to testify today regarding the regulation of over-the-counter derivatives. I also will provide this Committee with an update on our joint efforts with the Securities and Exchange Commission (SEC) to tailor our regulations in the best interest of the American public. I am pleased to testify on behalf of the Commodity Futures Trading Commission (CFTC).
Since I last testified before this Committee, the gavel was passed from Senator Harkin to Chairman Lincoln. I would like to thank Senator Harkin for his leadership and congratulate Chairman Lincoln. I look forward to continuing to work with both Senators as well as the Committee and Congress on necessary reform.
One year ago, the financial system failed the American public. The financial regulatory system failed the American public. Exhibit A of these twin failures was the collapse of AIG. Every single taxpayer in this room – both the members of this Committee and the audience – put money into a company that most Americans had never even heard of. Approximately $180 billion of our tax dollars went into AIG – that is more than $3.5 billion per each of your states. While a year has passed and the system appears to have stabilized, we cannot relent in our mission to vigorously address weaknesses and gaps in our regulatory structure.
I would like to address much-needed regulatory reform of OTC derivatives in the context of two principal goals: promoting transparency of the markets and lowering risk to the American public.
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