Regulating (or outlawing) derivatives is absolutely essential to avoid a repeat of what we just went through – or worse. 60 million is pocket change. This is clearly using the budget crunch as an excuse to remove even the paper-thin regulation package passed last year.
The most recent comprehensive spending bill produced by House Republicans would chop the CFTC’s funding by $56.8 million — almost a third of the agency’s entire budget — over the next seven months.
Funding at the SEC would be cut by $25 million over the same time period.
Those proposals were met with resistance from Democrats.
Under Dodd-Frank, the CFTC is charged with regulating the murky, multi-trillion dollar derivatives market that includes over-the-counter products called credit default swaps.
In order to do that, they need more money to invest in sophisticated technologies needed to monitor the market, and the staff to make sense of the data.
Republicans lawmakers argue that an overly-strict implementation of Dodd-Frank, and specifically the Volcker rule, would spark a mass exodus of clients from U.S. banks to their competitors abroad.
Many Republicans voted against Dodd-Frank last year and now view reducing funding at the CFTC and SEC as a way to slow its implementation.