Congressional committees deny Fed authority to oversee “systemic risks”

House Agriculture Committee, which has jurisdiction over the CFTC, produced a revised version of the Obama administration-proposed legislation. It deleted a portion that would have given the Fed power to oversee new rules set up by the exchanges and clearinghouses where derivatives trading takes place. The previous version of the Agriculture committee’s bill, released Oct. 9, included that passage. The current bill places that power solely in the hands of the CFTC.

The move follows that of the House Financial Services Committee, where Rep. Judy Biggert, an Illinois Republican, offered an amendment striking a similar provision in their version of the bill with the agreement of Committee Chairman Rep. Barney Frank (D-Mass.). The original version of the Financial Services bill was stronger than the Agriculture bill because it included all of the language originally put forward by the administration regarding systemic risk.

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