Securities and Exchange Commission chairman Chris Cox has proposed that his agency merge with the Commodity Futures Trading Commission (CFTC), creating a regulatory entity that would oversee both investor rights and futures trading. In a hearing before the House Oversight Committee yesterday, Cox suggested establishing a Congressional task force that “could address these urgent questions from a comprehensive standpoint,” and “tackle the challenge of merging the SEC and the CFTC, which I strongly support.”
The topic of broadening the SEC’s role through a takeover of CFTC duties has been supported in years past, but a trend towards market de-regulation had negated such discussion. Now, with the Treasury and Federal Reserve taking groundbreaking moves towards a highly regulated and supervised financial climate, increased SEC oversight seems a likely result.
Cox’s remarks came during a Congressional hearing that brought together the current SEC chairman with former Fed chairman Alan Greenspan and former Treasury secretary John Snow. The three were asked to explain their decisions in the years leading up to the market decline, with the general tone of criticism being that the three hadn’t done enough in the ways of market regulation.
Representative Henry Waxman (D-CA), chairman of the House Oversight panel, criticized the SEC chairman outright: “The reality, Mr. Cox, is you weren’t doing that job of proposing these regulations beforehand. You either didn’t anticipate the problem or you agreed with the philosophy that we didn’t need regulation.”
Waxman had similarly harsh words for Greenspan, saying, “You had the authority to prevent irresponsible lending practices that led to the subprime-mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price.”