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CFTC hearing on position limits in energy markets
Commodity Futures Trading Commission Chairman Gary Gensler says the CFTC should “seriously consider” setting position limits in the energy markets. At the opening of a third CFTC hearing on the matter, Gensler told witnesses he believes there should not be position limits only for certain agriculture commodities because, in his words, “at the core of promoting market integrity is ensuring markets do not become too concentrated.”CFTC Commissioner Bart Chilton called on Congress to grant the CFTC authority – and provide resources – for setting limits for most over-the-counter derivatives. “For me, if it has the potential to have some uneconomic impact, divorced from supply and demand, it’s something we need to be looking at.”
Chilton says he is not suggesting exactly what the CFTC is going to do, “But it seems that’s our responsibility in our jobs – we’re not businesses – we have lots of motives but as I said last week, none of those involve the word ‘profit’.”
Chairman Gensler says the CFTC is directed by law to “prevent the undue burdens” of excessive speculation. The over the counter derivatives marketplace is blamed in part for the wild spikes in futures prices last year.
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