On Wednesday, the CFTC said that it would begin “shelving” enforcement cases because budgetary restrictions will not allow the regulator to properly oversee the swaps and futures markets.
CFTC Chairman Gary Gensler said that the commission has been unable to prosecute some cases but did not say whether the tight budget would prevent the regulator from furthering its work on the global Libor scandal, Drovers Cattle Network reports.
After the credit crisis, the CFTC took on new responsibilities and is now charged with implementing rules governing the $650 trillion swaps market, a largely unregulated industry that contributed to the financial crisis. Under new CFTC rules, trades must be conducted through central clearinghouses and swaps must pass through swap execution facilities.
Gensler said that sequestration cuts will make it more difficult to finish the Dodd-Frank-mandated financial overhaul.
“I think if we have registration of 15 or 20 swap execution facilities, many of those applications will probably be sitting on the shelf for a while,” Gensler said, according to Drovers Cattle Network.
In the past, Gensler said that the agency’s budget has not been increased in proportion to the swaps market, which is eight times larger than the futures market, the CFTC’s original area of responsibility.