In a Feb. 3 letter to all U.S. senators, about 180 companies and groups representing end-users said some of the proposed reforms “would place an extraordinary burden” on them. “The loss of these important risk-management tools would be detrimental to businesses, the economy and job creation,” they wrote. Ford Motor Co., Procter & Gamble Co.,Boeing Co. and Walt Disney Co. were among the companies.

It’s all about the language:

If he can’t get rid of the exemption, Gensler said he hopes to narrow it as much as possible so that “hedge funds or other financial actors” can’t slip through the loophole.

Exempting end-users could permit up to 60 percent of standard transactions to escape the rules, Gensler said, citing statistics from the Basel-based Bank for International Settlements. Industry groups have argued that end-user transactions make up less than 15 percent of the standard market.

Bloomberg should have pushed him harder on his Clinton-era hijinks, though. It allows him to merely say that his views have “evolved,” whatever that means.

Bloomberg also reports that he “bristles at the idea that he’s a recent convert to regulation.” But that’s backed up mostly by stuff that happened after 2000.

He helped former Senator Paul Sarbanes with the 2002 Sarbanes-Oxley Act toughening corporate governance and accounting rules, he said, and worked with Democratic Representative Edward Markey of Massachusetts in the 1990s on strengthening consumer financial privacy protections.

He co-wrote a 2002 book, “The Great Mutual Fund Trap: An
Investment Recovery Plan,” that recommends index-fund investing
to avoid the “mistake of trusting the experts” who try to
outperform the market.

And the book mentioned in the second paragraph has nothing to do with regulation so it doesn’t support the case that he’s a longstanding regulator. Anyway, the important thing was holding him accountable for the 2000 bill and the derivatives debacle that followed.

With that caveat, a good one.


Due to some snafu, the link above chopped off a few paragraphs at the end after the colorful quote “confirmation facilities” (hey, I said it was a good story; I didn’t say it was The Bourne Identity).

I’ve appended the missing paragraphs below, which includes the bit about his 2000 role and a nice, reassuring quote as the kicker:

“I don’t see myself going back to Wall Street,” he said. “That’s very liberating.”

Hey, for us, too.

The chopped-off part is here:

He’s had more success on the issue of transparency. When lobbyists sought to let dealers use “confirmation facilities” —existing electronic systems that produce trade-confirmation reports — rather than forcing transactions onto exchanges, Gensler told lawmakers that that wouldn’t be transparent to regulators or the public. The words were removed from the House bill.

Details Matter

Fighting over words is important because a couple of vague
ones can undermine the bill, Gensler said. “I’m always up there
to persuade,” he said. “In terms of the ultimate legislation,
the detail really matters.”
“The more transparent a marketplace is, the more
competitive it is,” he said in a Jan. 29 speech to an American
Bar Association conference in Naples, Florida. “And the more
transparent a marketplace is, the lower the costs for hedgers,
borrowers, and ultimately, their customers.”
Gensler’s campaign goes beyond what the Obama
administration requested in its August plan for an overhaul of
financial regulation. In a letter to House and Senate committee
leaders sent six days after Obama’s plan was released, Gensler
called for fewer exemptions than Obama would allow.

Views ‘Evolved’

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.