American austerity is finally having one of its deep, pernicious effects in the service of runaway capitalists—preventing government regulators from regulating due to inadequate funds.
The Huffington Post reports:
The Commodity Futures Trading Commission has decided not to press charges against two traders in the “London Whale” case partly because it is so strapped for cash, its former chief enforcement officer, David Meister, told the Wall Street Journal. The CFTC is also slowing down investigations and laying off staff as a result of its funding crunch.
“We will do everything we can… but we have limited staff and limited resources,” Meister, who stepped down this week, told the WSJ. “Ultimately, it comes down to the math.”
House Republicans have consistently attacked the CFTC by withholding funding. They recently turned down a raise for the agency from $195 million to $315 million. Meanwhile, the markets under CFTC’s jurisdiction have grown 10 times their size five years ago, Bloomberg Businessweek reports. Moreover, some funding for the commission has come out of fines levied against investigated corporations.
More from The Huffington Post:
During the government shutdown, which was caused by House Republicans, the CFTC was unable to watch markets for several weeks. And as the government shutdown began, the CFTC was handed a critical new task, based on the Dodd-Frank financial-reform law, of watching the $600 trillion—that’s “trillion,” with a “t”—market for swaps. These derivatives were at the heart of the financial meltdown in 2008. The CFTC was already struggling to keep an eye on the $37 trillion—again, “trillion,” with a “t”—futures market.
Just last week the agency said it will have to furlough its workers for 14 days during the current fiscal year, simply to make ends meet.
“In handing the swaps market to the CFTC, Congress gave its biggest, hardest regulatory task to one of the smaller agencies in Washington,” Bloomberg Businessweek’s Matthew Phillips wrote.
The significance of the news is tempered only by the unhappy fact that regulators were doing little meaningful regulating to begin with.
—Posted by Alexander Reed Kelly.
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