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Stabenow: Derivatives Rules Must Work for Consumers, Businesses
Michigan Ag Connection - 03/04/2011

U.S. Senator Debbie Stabenow of Michigan, chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, Thursday said that derivatives market regulations must work for both consumers and businesses as agencies prepare to implement the Wall Street Reform and Consumer Protection Act. Chairwoman Stabenow's comments, made during a Committee oversight hearing, highlighted the benefits of effective oversight, but also warned of regulators overreaching and moving too quickly.

"While Congress greatly expanded the authority of the SEC and the CFTC, that authority came with a warning -- they must not overreach," Stabenow said. "These agencies must follow Congressional intent and protect end-users from burdensome margin requirements, which if imposed, would divert much-needed capital from investments and job creation. We must consider how new rules will fit together in a way that makes sense for the markets; whether that is phasing-in implementation or carefully sequencing the rules. We must make sure the market infrastructure is in place, the technology is ready, and that market participants are able to meet the requirements of this law. The new accountability and transparency we have created is clearly in the public interest and the most important thing is to get it right, not do it quickly."

Stabenow said farmers, manufacturers and American businesses rely on a strong derivatives market for risk protection, which "provides companies with the certainty to grow and create jobs." She also emphasized that the CFTC and SEC must be given the tools they need to effectively oversee the markets.

"We also know there are serious budget constraints," Stabenow said. "I am concerned that if our agencies don't have the tools they need, we are asking for a repeat of the crisis that cost, as I mentioned before, 8 million American jobs."

Chairman Gary Gensler, of the Commodity Futures Trading Commission, and Chairman Mary Schapiro, of the U.S. Securities and Exchange Commission, were among those who testified. Other witnesses included Jill Harlan, Corporate Risk Manager, Caterpillar; Terrence A. Duffy, Executive Chairman, CME Group Inc.; Larry Thompson, General Counsel, Depository Trust & Clearing Corporation; Steven M. Bunkin, Managing Director and Associate General Counsel, Goldman Sachs, and; Michael Greenberger, Law School Professor and Director, Center for Health and Homeland Security, University of Maryland School of Law.

An archived webcast of the hearing can be found on the Committee's website by visiting http://ag.senate.gov. Chairwoman Stabenow's opening statement is included below.

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