AFR Statement on CFTC Position Limit Rule
Washington, DC – Americans for Financial Reform, a coalition of more than 250 national, state, and local organizations working together for strong Wall Street reform issued the following statement today:
The Dodd-Frank financial reform law requires the Commodity Futures Trading Commission (CFTC) to establish position limits for the commodities market. On October 18th the CFTC approved a final rule on this issue.
“Wall Street driven excessive speculation in commodities market has increased prices – and price volatility – for everyday commodities including oil and food. It is costing US consumers hundreds of billions of dollars, driving up costs and uncertainty for producers, holding back economic recovery, and causing increased hunger and privation in the poorest parts of the world.
The Dodd-Frank Act tasked the CFTC with taking on this problem, and the CFTC has now taken a first step. Unfortunately, while this rule points in the right direction, it does not effectively contain the flood of financial speculation that is overwhelming the markets, and undermining their price discovery functions. Wall Street interests strongly oppose position limits, and have been throwing as many roadblocks as they can in the way of their effective implementation. But evidence of the increasingly serious problems caused by excessive speculation keeps mounting. A broad set of groups are calling for change, ranging from businesses which use commodity markets to hedge their price risks, to advocacy groups for working families trying to make ends meet, to faith based organizations concerned about increases in food prices and world hunger.
This rule must not be the end of the story. The CFTC must move forward from here and take the stronger steps needed to genuinely control excessive speculation in commodity markets.”
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