COMMENT: US Senate bashes regulators in hearing

Jan 16, 2014 | 12:07 PM | Andrea Hotter

Tags  Federal Reserve, Michael Gibson, Sherrod Brown, Elizabeth Warren, Jack Reed, Bart Chilton, Vincent McGonagle, CFTC commodities markets

NEW YORK — Accused of sleeping on the job and failing to work with its regulatory counterparts, the U.S. Federal Reserve took something of a verbal beating during a Senate hearing on the role of banks in physical commodities.

A day after the Fed announced a two-month consultation into the role of banks in physical commodity markets from oil to aluminium, its director of banking supervision and regulation was publicly rapped on the knuckles for not acting sooner.

“I’m incredulous at the speed at which the consultation process is being done,” Sen. Sherrod Brown (D., Ohio), chairman of the hearing, said.

Brown said that former Commodity Futures Trading Commission (CFTC) commissioner Bart Chilton, who left the U.S. commodities regulator at the end of last year, had provided testimony to him this week stating he had tried “for months” to obtain useful information from the Fed on banks’ ownership of physical commodity assets.

“If the regulators can’t get the information, how do we expect decent oversight?” Brown asked.....

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