Senate confirms new financial regulator
WASHINGTON (AP) - The Senate voted Tuesday to put Gary Gensler in charge of helping the Obama administration clamp down on financial firms that make risky bets in the derivatives market, less than a decade after he opposed doing so.
Gensler, a Treasury Department official during the Clinton administration, won Senate confirmation, 88-6, to head the Commodity Futures Trading Commission. The CFTC regulates futures and options trading in commodities like oil, natural gas and agricultural products.
Under a new plan announced by the Treasury Department this week, the CFTC is expected to take a lead role in enforcing new rules for the buying and selling of credit-default swaps and financial derivatives.
Credit default swaps, a form of insurance against loan defaults, are largely exempt from government oversight and figured prominently in the credit crisis.
Sens. Maria Cantwell, D-Wash., and Bernard Sanders, I-Vt., initially opposed a vote on Gensler’s nomination.
Gensler, who was an assistant secretary of the Treasury Department and later undersecretary for domestic finance, worked with Clinton’s Treasury Secretary Robert Rubin and then-Federal Reserve Chairman Alan Greenspan to keep credit default swaps away from regulation by the CFTC or the Securities and Exchange Commission.
Cantwell and Sanders backed down after being promised that he wouldn’t leave the derivatives market unchecked. Sanders, I-Vt., who met with Gensler last week, said Gensler promised he would seek additional market reforms, including the regulation of hedge funds.
Cantwell said she was swayed by the Treasury Department’s plan to put controls on the derivatives market.