Agriculture Committee Considers Derivatives
Opening Statement of Ranking Member Frank Lucas House Committee on Agriculture Committee
Hearing to review derivatives legislation
February 4, 2009
Thank you Chairman Peterson. These hearings will serve as a useful resource for this committee as we consider the draft legislation you have proposed. It is important that we gather as much information as possible from those who will be impacted by our actions. No one can argue with the concepts of transparency and accountability, but we must make sure that we create responsible legislation that calls for an appropriate level of regulation that respects the nature of the marketplace and considers the limits of government intervention. I appreciate the time and effort the participants of our three panels have put into today’s hearing. I look forward to your testimony and your answers to the questions posed by our committee members.
Opening Statement of Ranking Member Frank Lucas House Committee on Agriculture Committee
Hearing to review derivatives legislation
February 3, 2009
Thank you Chairman Peterson for calling today’s hearing. We appreciate the opportunity to examine your draft legislation that addresses concerns with the derivatives industry and its impact on the U.S. economy During the past few months, the committee has spent a great deal of time monitoring the issue of trading activity in the futures markets, as well as exploring the role credit default swaps have played in our current financial crisis. The draft legislation we are considering would impact a wide array of financial instruments, but what the ultimate effect will be in the marketplace is unknown. My main concern is how this legislation will impact risk management for agricultural producers? How far-reaching will this legislation go beyond credit default swaps and derivatives, in general? I support greater transparency and accountability with respect to over-the-counter transactions. However, I also believe any legislation to regulate financial markets has to strike a delicate balance between protecting the economic workings of the country and creating opportunities for economic growth, business expansion, and risk management for our agricultural producers. To that end, I believe this committee must work to ensure that the Commodity Futures Trading Commission plays a leading role in appropriately regulating the derivative and commodity markets once the committee decides what level of additional regulations are needed. We should also work to ensure that CFTC has the tools it needs—human resources, technical resources, economic resources—to effectively carryout its statutory mandate. It must be noted that the CFTC has a proven track record in clearing futures contracts and to date has not lost a single dollar of a single customer’s money due to failure of a clearinghouse. Finally, I would like to thank the participants of our two panels today. We appreciate your time and commitment to the public policy process, and we look forward to your testimony.
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