Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture Nutrition and Forestry, urged the nation’s chief financial regulators to implement the Dodd-Frank Act. Chairwoman Stabenow stated that the recent failures of firms like Peregrine Financial Group and MF Global, as well as trading losses at JP Morgan and the ongoing LIBOR scandal, all underscore the need to implement the bill, which was passed by Congress more than two years ago. CFTC Chairman Gary Gensler and SEC Director of the Division of Trading and Market, Robert Cook, testified at hearing.
Lofchie Comment: There is nothing in Dodd-Frank that would be particularly relevant as far as the losses at Peregrine and MF Global are concerned, and any connection between Dodd-Frank and either JP Morgan trading losses or LIBOR is at best uncertain. For example, the losses at Peregrine/MF Global were caused by fraud at an FCM or deficiencies in the custody rules and operations at an FCM; these are not issues that Dodd-Frank addresses. In fact, I would say that Dodd-Frank is a distraction from the regulators’ ability to address these issues.
View Press Release in full here (links externally to AG Senate website).