President Barack Obama is nominating a top Treasury Department official to run the independent agency that regulates the futures and options markets.
The White House says Obama will announce the nomination of Timothy Massad to head the Commodity Futures Trading Commission today. For the past three years, Massad has overseen the Troubled Asset Relief Program, the bank rescue plan known as TARP.
If confirmed by the Senate, Massad would succeed Gary Gensler, who plans to step down when his term ends in January.
Obama is expected to use Massad's nominating ceremony to call on Congress to fully fund the CFTC, one of the smallest and most thinly funded US agencies. The 2010 financial overhaul law gave the CFTC the task of laying down rules for oversight of derivatives, the complex instruments traded in a USD 700 trillion worldwide market that has been unregulated.
The agency has now completed 43 of the 60 rules it was charged with putting into motion under the overhaul law. By comparison, other regulators, including the Securities and Exchange Commission, have adopted roughly a third of their rules.
Massad would take over the task of implementing the remaining rules. For many, a key question is whether he will exercise independence from the administration and the banks, as Gensler often did.
Gensler, who had worked for nearly 20 years on Wall Street, surprised many by being a tough regulator of banks. He pushed for stricter rules that banks had lobbied against. And he wasn't afraid to take positions that clashed with the Obama administration.
Massad has worked for the Treasury since Obama took office in 2009 and has been an advocate for the administration's policies.
"The question is whether he has the guts, independence and commitment ... To stand up to Wall Street," said Dennis Kelleher, the president of Better Markets, a group that advocates strict financial regulation. "It's a dramatically difficult job at an independent agency at a critical time.
