Timothy Massad Nominated as CFTC Chairman
President Barack Obama’s nomination of Timothy Massad to replace Gary Gensler as the chairman of the Commodity Futures Trading Commission (CFTC) came as no surprise. Massad played a significant role in the bank bailout program brought about by the 2008 financial crisis and should the Senate confirm his nomination, Massad will head the agency charged with implementing the Dodd-Frank Act aimed at regulating trading of complex derivatives on Wall Street. This lucrative, and often volatile, market has been accused of being one of the root causes in the destabilization of the US economy and the CFTC has the task of ensuring this particular piece of history is not repeated.
Critics of Obama’s choice note that Timothy Massad may not be as tough on Wall Street as Gary Gensler has been. During his tenure at the agency, which only recently took on oversight of the derivatives market, Gensler was outspoken in his criticism of the big banks and of Obama’s take on regulatory issues. Gensler pushed through a host of new regulations, but there are still plenty of issues to be addressed, and these will now fall under the purview of Massad who appears to be more inclined to fall in line with the thinking of the Obama administration.
In commenting on President Obama’s choice, another outspoken critic of big banks and Wall Street, Senator Elizabeth Warren (D-Mass) noted that Gensler had set a very high standard. She went on to say that she looked forward to hearing more from Tim Massad regarding what steps the CFTC should take to further reduce the risk of crises in the future.
In addition to overcoming criticism of his appointment, the CFTC is reportedly short of the funds needed to carry out its job competently. Gensler recently revealed that CFTC employees would be furloughed for two weeks, with some of the agency’s cases being dropped because of insufficient funds. In his speech regarding Massad’s nomination, Obama acknowledged the need for more funds saying that ever since the Wall Street reform bills were passed, “its opponents have tried to starve funding for the agencies responsible for carrying it out.” He went on to say that the CFTC makes the US financial system work better and it’s foolish not to provide adequate resources for it.