News

June 29, 2009

US Goes For “Destabilising” Speculators

By Sally White

Fears of speculators’ influence on commodity market prices are now being shared by the US government, despite the scepticism voiced in the Bush years. The Obama administration plans to extend the surveillance of hedge funds on the grounds that they can “destabilise” markets. Washington is preparing for a major overhaul of financial regulation with the creation of a “council of regulators” to monitor the system. President Barack Obama said last week that US funds would be required to register with the Securities and Exchange Commission.

Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC) speaking in his first major policy speech, backed international proposals for detailed scrutiny of hedge fund positions and working practices. Commodity index traders were accused in a US senate report released last week of causing commodity market price bubbles. Senator Carl Levin said the CFTC needed to “change course, rein in commodity index traders and clamp down on excessive speculation that is disrupting commodity...