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WASHINGTON (AP) - President Barack Obama is praising his choice to run the Commodity Futures Trading Commission as someone who doesn't seek the spotlight but consistently delivers good results.
Obama announced Tuesday he was nominating Timothy Massad (MAS'-sed) to run the independent agency, which regulates the futures and options markets. Massad is a Treasury Department official who has overseen the Troubled Asset Relief Program, the bank rescue plan known as TARP.
Obama touted the nearly $30 billion in returns for taxpayers Massad has secured from that program.
Obama also urged Congress to properly fund the agency. He said budget cuts have left the agency outmanned and outgunned. He said the agency has had to drop open enforcement cases for lack of resources.
Obama said it's like not having enough cops on the beat.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
President Barack Obama is nominating a top Treasury Department official to run the independent agency that regulates the futures and options markets.
The White House says Obama will announce the nomination of Timothy Massad to head the Commodity Futures Trading Commission on Tuesday. For the past three years, Massad has overseen the Troubled Asset Relief Program, the bank rescue plan known as TARP.
If confirmed by the Senate, Massad would succeed Gary Gensler, who plans to step down when his term ends in January.
Obama is expected to use Massad's nominating ceremony to call on Congress to fully fund the CFTC, one of the smallest and most thinly funded U.S. agencies. The 2010 financial overhaul law gave the CFTC the task of laying down rules for oversight of derivatives, the complex instruments traded in a $700 trillion worldwide market that has been unregulated.
The agency has now completed 43 of the 60 rules it was charged with putting into motion under the overhaul law. By comparison, other regulators, including the Securities and Exchange Commission, have adopted roughly a third of their rules.
Massad would take over the task of implementing the remaining rules. For many, a key question is whether he will exercise independence from the administration and the banks, as Gensler often did.
Gensler, who had worked for nearly 20 years on Wall Street, surprised many by being a tough regulator of banks. He pushed for stricter rules that banks had lobbied against. And he wasn't afraid to take positions that clashed with the Obama administration.
Massad has worked for the Treasury since Obama took office in 2009 and has been an advocate for the administration's policies.
"The question is whether he has the guts, independence and commitment ... to stand up to Wall Street," said Dennis Kelleher, the president of Better Markets, a group that advocates strict financial regulation. "It's a dramatically difficult job at an independent agency at a critical time."
Sen. Elizabeth Warren, D-Mass., a member of the Senate Banking Committee, said in a statement, "I look forward to hearing more from Tim Massad about what steps he thinks the CFTC can take to further reduce the risk of future crises and level the playing field for middle-class families."
For the CFTC, some of the thorniest and most critical rules are among those that remain. They include the so-called Volcker Rule, which would prohibit banks from trading for their own profit. Its latest version includes an exemption for banks to make such trades when they are used to offset other risks taken. Adoption of the rule has been delayed largely because of Wall Street banks' objections and the need to get a handful of federal agencies, including the CFTC, to agree on its final form.
Under Gensler, the CFTC wrote new rules to bring derivatives under government supervision for the first time. Derivatives were blamed as the accelerant on the fire that ignited the financial crisis.
The value of derivatives is based on a commodity or security, such as oil, interest rates or currencies. They are often used to protect businesses that produce or use the commodities, such as farmers or airlines, against future price fluctuations. But they also are used by financial firms to make speculative bets.
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