Wall Street lobbyists, seeking to delay a July 12 deadline for rules that would rein in lucrative trading by banks overseas, pressed their case before the Commodity Futures Trading Commission (CFTC), the New York Times DealBook blog reported yesterday. While chairman CFTC Gary Gensler is looking to go forward with the deadline, a few of his colleagues are still fighting his plan to extend the agency’s reach beyond American borders, an issue that emerged during the 2008 financial crisis. Mark Wetjen, a Democratic CFTC commissioner recently called the deadline “arbitrary.” As the deadline nears, the plan to regulate trading by American banks in London and beyond has set off a dispute at the agency. During the financial crisis, trades by the American International Group in London nearly brought the insurance giant and its Wall Street clients to their knees. JPMorgan Chase’s $6 billion trading loss at a London unit last year further highlighted how risk-taking can come crashing back to American shores. The blowups spurred a federal crackdown on the $700 trillion marketplace for financial contracts known as derivatives—contracts that derive their value from an underlying asset like a bond or an interest rate. Even today, banks continue to book much of their derivatives trading overseas. Wall Street’s biggest banks, regulators say, have more than 2,000 legal entities spread internationally.
