In the ongoing struggle to shield ordinary Americans from the risks and excesses of big banks, Congress can be counted on to stand with... the big banks.
That's according to Gary Gensler, head of the Commodity Futures Trading Commission, who said at an industry event on Thursday that a recent proposal from the House Appropriations Committee to cut his agency's funding by 12 percent is evidence that Congress "sides with Wall Street."
The CFTC is one of the financial regulatory agencies given expanded powers under the Dodd-Frank Act, which was devised in the wake of the financial crisis to prevent a similar disaster from ever looming. Under Dodd-Frank, the CFTC has been made responsible for regulating the $700 trillion market on derivatives -- the complex financial instruments that played a central part in the 2008 meltdown -- but it hasn't taken over that role yet, in part because regulators still need to agree on what does and doesn't count as a derivative.
According to CNN, the derivatives market is eight times the size of the futures market, which the CFTC currently oversees. For the CFTC to take on so much more work with so much less funding, said Gensler, would be a recipe for failure.
Gensler might not be wrong to accuse Congress of taking Wall Street's side. Although the financial crisis did significant damage to the national economy, lawmakers have since had a spotty record when it comes to financial regulation.
In December, Republicans closed ranks against the CFTC, refusing to grant it any more funding even though President Obama had asked for the agency's budget to grow by more than $100 million. A similar even transpired in March, when House Republicans defeated a bill to further fund the Securities and Exchange Commission.Conservatives have also stood in the way of funding the Residential Mortgage-Backed Securities Working Group, a task force responsible for investigating the housing crisis that triggered the financial panic of 2008. They've also delayed the confirmation of several presidential appointees to key positions in the regulatory system.