CFTC Chair Calls for Staff Expansion

Despite President Barack Obama and Congress tasking the U.S. Commodity Futures Trading Commission with a critical role in the restructuring of the economy three years ago, the agency has retained nearly the same number of employees for two decades, CFTC chair Gary Gensler told an audience at the Institute of Politics Tuesday evening.

As the keynote speaker at the 2013 Annual Glauber Lecture on Financial Regulation, Gensler told the audience at the Institute of Politics of an urgent need for growth at an understaffed agency.

“To actually have markets be well-functioning, you need well-resourced agencies overseeing them,” Gensler said. “That’s not where the CFTC is right now. We’re at 675 people right now, which is about the size we were 20 years ago…and yet, we now oversee this 400 trillion dollar market which is 10 times the size of the futures market place that we used to oversee.”

Gensler said that before Obama and Congress increased the responsibility of the CFTC—which regulates investment in commodities among other tasks—the agency could be viewed as something “you probably would never have heard of unless you grew up on a farm somewhere.”

Gensler admitted that the CFTC was initially unprepared for the newly-imposed tasks in 2010, but he said that he has seen significant improvement even though the economy has not fully recovered.

“Five years ago the US economy was in free-fall,” Gensler said. “It cost middle class Americans and hardworking people around the globe their jobs, their pensions, their homes.”

Gensler said that in the midst of the deepening recession much of the country’s economic future hinged on the success of an understaffed organization.

“We were an agency that did maybe three to five rules a year, and we were being asked to do 60 [rules] and Congress gave us one year,” he said. “It was a daunting task, and three years along we’ve largely completed the task.”

Gensler invoked baseball to warn the audience about a future without an expansion in the size of the CFTC staff.

“Now you might not have liked the umpire’s call in the Red Sox game the other night,” Gensler said. “But can you imagine if Major League Baseball expanded tenfold and you didn’t expand the number of umpires?... It wouldn’t work too well. The fans after a while would lose confidence in the game. And I think that’s really what’s going to happen [with the CFTC].”

Robert Glauber ’61, a Kennedy School lecturer who introduced Gensler at the beginning of the event, said he was excited to feature Gensler as the speaker at his name-sake forum.

“We are certainly most fortunate to have [Gensler] as this year’s speaker. He’s been at the center of some of the most important and controversial rulemaking going on with the financial crisis,” Glauber said.