Regardless of the changes to the financial regulatory reform landscape that may lie ahead, Commodity Futures Trading Commission Chairman Timothy Massad used his speech at CME Group’s Global Financial Leadership Conference to highlight the progress that has been made during his 30 months at the helm of the commission.
The ascension to power of President-elect Donald Trump has led to speculation about the repeal of the Dodd-Frank Act. However, in what are almost certain to be his last comments at GFLC in his role as CFTC chairman, Massad said a consensus has formed that many reforms, such as central clearing, have proven beneficial to markets.
Massad also teased the news that will come out later this week as the CFTC plans to release the results of the supervisory stress test it has conducted on 5 clearinghouses under the its jurisdiction. According to Massad, the stress tests will assess how clearinghouses would perform in “extreme, but plausible” scenarios.
Massad also stressed the important impact technology will have on the future of financial markets. Blockchain has been all the rage in the financial industry. It is certainly on Massad’s radar screen and he expressed hope that regulatory bodies would not stand in the way of technological advances.
“We are looking at the rules describing how books and records must be kept, recognizing that these rules are outdated and will simply become more so if and when developments like “smart contracts” become a reality.”
In a moment of frankness that is typical of the atmosphere at GFLC, Massad noted the relative importance of derivatives rules and stated there might be other reforms that are of more concern to the American people.