By Benjamin Goad - 10/31/13 05:54 PM EDT
The chairman of the Commodity Futures Exchange Commission (CFTC) argued Thursday for a major funding boost, saying the small agency lacks sufficient resources to carry out its expanding mission.
During remarks at George Washington University, Gary Gensler argued in favor of President Obama’s proposal to increase the agency’s budget from $195 million to $315 million in the next fiscal year.
The CFTC now has 674 employees, only 40 more than it did more than 20 years ago.
Since then Congress has broadened the scope of the CFTC’s authority exponentially, tasking one of the smallest U.S. financial regulators with overseeing the $400 trillion swaps market.
“Somewhere the numbers aren’t adding up, but that’s the truth,” Gensler said.
Few agencies have been as aggressive as the CFTC in tackling a host of new financial rules required by the Dodd-Frank Wall Street reform law enacted to protect against a repeat of the 2008 economic crisis.
Government-wide, agencies have by some counts completed less than half of the rules mandated by the law. But the CFTC is largely finished with its rulemaking, having issued 65 final rules since Dodd-Frank was enacted in 2010.
The rules are largely focused on reining in swaps or derivatives trading, a major contributor to the crisis.
“These successes should not be confused with the agency having sufficient people and technology to oversee these markets,” Gensler cautioned. “Because we simply do not.”
The additional money, he said, is needed to hire surveillance staff to pore over the details being collected for 1.8 million swaps transactions in new data repositories set up by the agency.
“I cannot tell you that we’re really looking at many of those transactions right now, because we’re not,” he said.
Gensler said the agency needs more staff to enforce the new rules and go after bad actors in the futures and swaps markets. That the agency has completed its rulemaking obligations only exacerbates the need for additional employees, since it takes more people to enforce the regulations than it does to write them, he said.
“I think that completing the rule set should not be confused with a limited need for funding,” he said. “In fact it is exactly at this time why we need more funding.”