WASHINGTON, June 23 (UPI) -- A former Commodity Futures Trading Commission regulator said the commission missed a cue from JPMorgan Chase as it delayed vote on a new rule.
The vote among the CFTC's five commissioners was postponed this week as the commissioners worked out compromises with Commissioner Mark Wetjen, who has pushed to delay the impact of a rule restricting trading by U.S. firms that do their risky derivatives betting overseas.
JPMorgan recently lost what some estimate is between $2 billion and $5 billion on market bets that went sour.
The five commissioners include two Democrats and two Republicans plus commission Chairman Gary Gensler, a Democratic appointee.
Wetjen, a former aide to Senate Majority Leader Harry Reid, a Democrat, has proven to be the more independent among the Democratic commissioners, who include Commissioner Bart Chilton, The New York Times reported Saturday.
But given the recent losses at JPMorgan, former regulator Michael Greenberger, now a professor at the University of Maryland law school, told the Times, "It's unbelievable to me that this (new rule) would be a problem in this day and age, especially because of the JPMorgan loss."
The lesson was not lost on Gensler.
"Recent events at JPMorgan Chase are a stark reminder of how swaps traded overseas can quickly reverberate with losses coming back into the United States," he said recently.
"The risk can come crashing back here pretty quickly," he said.