Wall Street Set to See New Faces

Best Growth Stock – The chief regulator of U.S. derivatives markets, Gary Gensler is attempting to crack the monopoly of the Wall Street club. He admitted that it will take time to wind up the job. Implementation of Dodd-Frank financial reforms of 2010 is one of the major projects of the Commodity Futures Trading Commission. Gensler declared that the agency under his leadership is striving to attract more businesses to come to this highly profitable derivatives market.

At the future face of Finance Summit on Wednesday, he said that they will try to carry out the Congress’s wish of opening up the market. The results will be there for the public to see in a few years time. At present, JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America and Morgan Stanley are the companies that dominate this worldwide derivatives market which is valued at $600 trillion. Incidentally, Gensler had worked for 18 years at Goldman Sachs where he became a partner at the age of 30. Later on he joined the Treasury Department and became the chairman of CFTC in 2009. Questions have often been asked about liaisons between the Goldman Sachs and the power-brokers in Washington. Gensler said that he his experiences at the Goldman Sachs had often been useful to him in his work. At the same time, he mentioned that he had learnt much since leaving the company.

Gensler had been facing hostile lobbying by Wall Street firms that are bent upon on maintaining the status quo ever since his agency has started working towards enforcing the new rules passed by Congress in the Dodd-Frank law. He said, it is an anti-climax to the government bailing out Wall Street during the 2007-2009 economic crisis as a large portion of the American population are of the opinion that in spite of various reforms, Wall Street still dominates the financial system. He feels that in order to lessen the risks caused by the market to the system that had earlier been unmonitored, it necessary to clean up as many of these messes as possible.

Among the primary concerns of the Dodd-Frank, one is to forward a major part of the OTC derivatives market through exchanges, electronic trading platforms and central clearinghouses which back up the dealings in derivative contracts. In the opinion of Gensler, it is expected to reduce the risks that the taxpayers stand. In their place, the clearinghouse will deal with the risks. Though this will mean lowering of interconnectedness, the taxpayers stand to gain in the final analysis.

Commenting on the all-pervasive confusion during the calamity of the value of toxic assets on the accounts of major companies like American International Group, he commented that it is better to maintain a degree of transparency. The current laws state that such things are to be estimated each day. The valuations are to be shared by the counter-parties parties. In case of a clearinghouse being involved, it has to make it known to the public. Transparency, clearinghouses and regulation of the dealers are the goals that the agency is aiming to achieve.