WASHINGTON (Reuters) - The financial regulator charged with overseeing U.S. commodity markets has just one specialist examining oil trades.
The reason? It does not have enough money to hire any more, according to U.S. Commodity Futures Trading Commission Chairman Timothy Massad.
“We need more resources for the compliance function, for the examination function, for market surveillance,” Massad told the Reuters Financial Regulation Summit on Thursday. “We have, basically, one specialist on the oil market. We don’t have a team of people.”
The challenge of finding money to meet much bigger demands is not unique to the CFTC. Even as Congress has greatly expanded the responsibilities of financial regulators following the 2007-2009 financial crisis, it has been loath to provide them with bigger budgets.
Massad’s peers have also cited a lack of funding as a hindrance to meeting requirements of the sweeping 2010 Dodd-Frank financial reform law. U.S. Securities and Exchange Commission Chair Mary Jo White recently told a congressional budget committee her agency needs to hire hundreds more people to fulfill its statutory obligations.
The CFTC would like to rely more on fees assessed to the financial entities it oversees, but will still need a bigger budget allocation from Congress, Massad said.
For fiscal year ending September 2017, the CFTC asked Congress for $330 million, $80 million more than it received the prior year, according to a document on its web site. About 64 percent of the increase would go toward more staffing. The other 36 percent would be used to improve technology.
“What’s happened over the last five, six years is, our jurisdiction was dramatically expanded,” Massad said, rattling off a long list of new and expanded products and markets his agency must now oversee.
“You run into people who say, ‘Well you’ve written the rules, why do you need any money?” he said. “Well, it doesn’t quite work that way. You’re going to have to enforce them.”
Reporting by Lauren Tara LaCapra; Additional reporting by Lisa Lambert and Sarah N. Lynch; Editing by Meredith Mazzilli