U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

54–564 PDF 2010

S. HRG. 111–240 

NOMINATION HEARING TO CONSIDER 

GARY GENSLER TO BE CHAIRMAN OF THE CFTC 

HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

FEBRUARY 25, 2009 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

TOM HARKIN, Iowa, Chairman 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

KIRSTEN GILLIBRAND, New York 

MICHAEL BENNET, Colorado 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

MIKE JOHANNS, Nebraska 

CHARLES E. GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

MARK HALVERSON, Majority Staff Director 

JESSICA L. WILLIAMS, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

VERNIE HUBERT, Minority Chief Counsel 

(II) 

(III) 

C O N T E N T S 

Page 

HEARING(S): 

Nomination Hearing to Consider Gary Gensler to be Chairman of the CFTC .. 1 

Wednesday, February 25, 2009 

STATEMENTS PRESENTED BY SENATORS 

Harkin, Hon. Tom, U.S. Senator from the State of Iowa ..................................... 1 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 6 

Chambliss, Hon. Saxby, U.S. Senator from the State of Georgia ........................ 2 

Lugar, Hon. Richard G., U.S. Senator from the State of Indiana ....................... 3 

Mikulski, Hon. Barbara A., U.S. Senator from the State of Maryland ............... 4 

Sarbanes, Hon. Paul, former U.S. Senator from the State of Maryland ............. 7 

Panel I 

Gensler, Gary, Nominee to be Chairman and Commissioner of the Commodity 

Futures Trading Commission .............................................................................. 9 

APPENDIX 

PREPARED STATEMENTS: 

Cochran, Hon. Thad ......................................................................................... 40 

Gensler, Gary .................................................................................................... 43 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Committee questionnaire and Office of Government Ethics Executive 

Branch Personnel Public Financial Disclosure Report filed by Gary 

Gensler ........................................................................................................... 46 

Various organizations, letters of endorsement for Gary Gensler ................. 70 

QUESTION AND ANSWER: 

Harkin, Hon. Tom: 

Written questions for Gary Gensler ................................................................ 74 

Brown, Hon. Sherrod: 

Written questions for Gary Gensler ................................................................ 77 

Casey, Hon. Bob: 

Written questions for Gary Gensler ................................................................ 78 

Grassley, Hon. Charles E.: 

Written questions for Gary Gensler ................................................................ 79 

Nelson, Hon. Ben: 

Written questions for Gary Gensler ................................................................ 81 

Roberts, Hon. Pat: 

Written questions for Gary Gensler ................................................................ 82 

Stabenow, Hon. Debbie: 

Written questions for Gary Gensler ................................................................ 84 

Gensler, Gary: 

Written response to questions from Hon. Maria Cantwell ........................... 85 

Written response to questions from Hon. Dianne Feinstein ......................... 98 

Written response to questions from Hon. Carl Levin .................................... 108 

(1) 

NOMINATION HEARING TO CONSIDER 

GARY GENSLER TO BE CHAIRMAN OF THE 

CFTC 

Wednesday, February 25, 2009 

U.S. SENATE, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, 

Washington, DC 

The Committee met, pursuant to notice, at 2:40 p.m., in room 

SD–106, Dirksen Senate Office Building, Hon. Tom Harkin, Chairman of the Committee, presiding. 

Present: Senators Harkin, Conrad, Stabenow, Nelson, Klobuchar, 

Chambliss, Lugar, Roberts, Grassley, and Thune. 

STATEMENT OF HON. TOM HARKIN, U.S. SENATOR FROM THE 

STATE OF IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

Chairman HARKIN. The Senate Committee on Agriculture, Nutrition, and Forestry will come to order. I know we just had a vote. 

We are waiting on some Senators to arrive. Senator Chambliss said 

he would be a few minutes late and to go ahead and proceed. 

Good afternoon, and we thank you all for joining us today. We 

meet this afternoon to consider the nomination of Mr. Gary Gensler 

to serve as the Chairman of the Commodity Futures Trading Commission. As many of you know, Mr. Gensler is not new to public 

service. He served as Assistant Secretary for Financial Markets, 

and later as Under Secretary for Domestic Finance at the Department of Treasury. He was at Treasury about 3 years, so he brings 

this experience to this CFTC position. 

This nomination comes at a very challenging time. Since the 

CFTC was created 35 years ago, it has never faced more daunting 

market challenges than those that the next Chairman and Commissioners will face. Our financial markets are still unstable, and 

the physical commodities of energy, agriculture and metals have 

experienced dramatic price movements and volatility. 

Again and again, actions in our futures markets have caused 

some havoc across our country and economy. I thought about this, 

and in principle are supposed to provide some stability and certainty and not to create havoc. 

One year ago this weekend, we had an experience in the cotton 

market. Speculative funds ran up the prices of the cotton futures 

market at a time when there were record surpluses of cotton and 

not very much demand. So there was a ton of money, speculative 

money, going into the futures markets that had absolutely nothing 

2 

to do with supply and demand. It served no constructive economic 

purpose except maybe to make some people wealthy. 

The markets for other agricultural commodities experienced similar disruptions for wheat, corn, and soybeans. They rose to record 

levels last year. Country elevators that had offered producers forward contracts and then hedged their positions on the Chicago 

Board of Trade struggled to find the cash resources to meet margin 

calls. Users of commodities from bakers to pork producers to ethanol facilities, suddenly realized that the price they would have to 

pay for the most critical inputs was double the price they had paid 

just a couple months before. 

Prices in the energy sector also shot up to unprecedented levels 

last summer. Energy users from airlines to commuters to farmers 

struggled with higher fuel costs. So in places like my State of Iowa, 

people are wondering; is Washington really asleep at the switch? 

Do we understand the disruption and damage caused by ineffective 

and inadequate oversight and regulation? 

Last night, President Obama urged Congress to move quickly on 

legislation that will finally reform our outdated regulatory system. 

He called for tough new common-sense rules of the road so that our 

financial market rewards drive innovation and punishes short-cuts 

and abuse. So it is our responsibility to rise to the President’s challenge. 

This Committee and the Commodity Futures Trading Commission have a profound responsibility to craft and implement toughminded regulatory reforms. Last month, I reintroduced the Derivatives Trading Integrity Act. ‘‘Integrity’’ is a synonym for honesty. 

The bill would require that all futures contracts trade on a regulated exchange, including all derivatives contracts. I came to that 

position after our hearing in October on derivatives. Exchangetraded contracts are subject to a level of transparency and oversight that is just not possible in over-the-counter markets. 

The best-intentioned and most brilliantly crafted legislation will 

be only as effective as the regulators who implement it. We must 

have an unflinching determination on the part of the Commodity 

Futures Trading Commission to restore integrity to these important markets. 

That is why the position of Chairman of the CFTC is so critical. 

And that is why this Committee must gain assurance that the 

nominee before us is prepared to provide strong leadership at the 

CFTC, to work with this Committee to develop solutions to ensure 

that markets are open, transparent, free of excessive speculation, 

and that all trades clear. We need to know if Mr. Gensler will be 

committed to repairing the damage from abuses and mistakes of 

the past and ensuring that they are never repeated. 

With that, I will hold the record open at this point for a statement by Senator Chambliss. I would ask if Senator Lugar or others 

would have opening statements that they would care to make at 

this time. 

Senator Chambliss, for an opening statement. 

STATEMENT OF HON. SAXBY CHAMBLISS, U.S. SENATOR FROM 

THE STATE OF GEORGIA 

Senator CHAMBLISS. Mr. Chairman, thank you. 

3 

I will submit my opening statement for the record, and let me 

just echo, Mr. Gensler, we welcome you to the Committee, and we 

welcome your girls to the Committee. 

We have had the opportunity to visit and obviously I know your 

background. We look forward to continuing a dialog on the issues 

that we know face this industry and look forward to working with 

you down the road with respect to making sure that we continue 

to provide financial investors in this country the type of regulation 

that is fair, reasonable, and will ensure safety and security in the 

market. 

So thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Senator Chambliss. 

Senator Lugar. 

STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR 

FROM THE STATE OF INDIANA 

Senator LUGAR. Mr. Chairman, let me just add that I appreciated 

especially the hearing you conducted in which we participated last 

October. I felt that was an educational experience for us and for 

the American people, and I appreciate the progress that has occurred at CFTC subsequent to that hearing. People were able to do 

some things administratively. 

But I would just simply chime in to say that as a very junior 

Senator, Senator Leahy and I sat at the end of the table and were 

assigned by Chairman Herman Talmadge the responsibility of 

oversight of the CFTC, because apparently no one else on the Committee understood what he was doing and no one really wanted to 

find out. So we have had some parental responsibilities in subsequent years, and I appreciate very much the evolution. But this is 

a pivotal moment today as we take a look at a new chairmanship, 

a new era, the regulatory suggestions you have made and other 

members likewise. And so I look forward to the hearing. 

Chairman HARKIN. Thank you very much, Senator Lugar. 

Senator Nelson? 

Senator NELSON. Thank you, Mr. Chairman. Unfortunately, I 

have to leave, so I am going to make a couple of statements and 

leave open a question which I hope Mr. Gensler can respond back 

to us in writing. 

You have outlined very clearly and succinctly the problems that 

we face today with the volatility that we have experienced in the 

markets. I hope we have the opportunity to see where the weaknesses are and what fixes are necessary. Credit derivatives, obviously regular commodities, physical commodities, need to be bound 

by certain rules. But it is important that whatever regulations are 

put in place does not constitute strangulation of the commodities 

in the whole. 

I think the CFTC must preserve the price discovery aspect of the 

markets and risk management hedging benefits that it provides. It 

needs to regulate with a focus on what has become more and more 

important, the system risk, and not just look for bad actors in the 

situation. 

I think the thing that interests me most is the need that the 

CFTC should be proactive and try to anticipate matters that pose 

a threat to systemic risk than always be reacting. I know it is a 

4 

very challenging thing to be able to predict and to anticipate without some market experience to guide you as to what needs to be 

done. But waiting until the systemic risk is so big or the fire is beyond the capability of being put out is not a course of action that 

we would like to see happen again. 

The question that I really have of Mr. Gensler, should he be confirmed, is—we proposed that the CFTC issued—they issued a report, and we came back and we asked that the report’s recommendation of the review of, quote, whether to eliminate the 

bonafide hedge exemption for swap dealers and replace it with a 

new risk management exemption subject to certain conditions that 

we suggested that be done. And my question is do you know whether that has been done or, if it has not, whether it will be done. And 

if you can just get back to me on that, that certainly will satisfy 

me. 

But thank you very much for your willingness to serve, and I 

look forward to my two colleagues giving a great introduction of 

you. Thank you. 

Chairman HARKIN. Thank you, Senator Nelson. 

Senator Grassley. 

Senator GRASSLEY. Yes, thank you very much, Mr. Chairman. 

Obviously, we need to congratulate Mr. Gensler. I think we ought 

to also thank Walt and Michael for their acting chairmanship and 

the hard work that they put into the work of the Commission. I 

think our last year has shown that more aggressive activity on the 

part of the CFTC is really needed. 

This is a year when we are going to have to decide to a greater 

extent the appropriate role of regulation of speculators to a greater 

extent than we have in the past. We are going to have to decide 

if we are serious about giving the CFTC the resources it needs to 

do its job effectively. And that is what new leadership is all about, 

I hope, and, of course, the work of this Committee as well. 

So I am not going to be able to stay around here to ask questions, but I told Mr. Gensler that I would be submitting about eight 

questions for answer in writing. So I thank you, Mr. Chairman, for 

the privilege of making a statement, and I will put my entire statement in the record. 

Chairman HARKIN. Thank you very much, Senator Grassley. 

We have a distinguished colleague and a distinguished former 

colleague, and I will recognize them in order for purposes of introduction. Senator Mikulski from the great State of Maryland, welcome to the Agriculture Committee. 

STATEMENT OF HON. BARBARA A. MIKULSKI, U.S. SENATOR 

FROM THE STATE OF MARYLAND 

Senator MIKULSKI. Thank you very much, Mr. Chairman, and 

also Senator Cardin, who is currently presiding, will also be joining 

us, and it shows the enthusiastic support that Mr. Gensler enjoys 

from the Maryland delegation. 

First of all, in terms of the Commodity Futures Trading Commission, we know how important this Commission is. But as Senator 

Lugar so aptly said, it is often little understood or little noted, unless there is a crisis in the markets. And last summer, also the 

5 

whole issue of commodities and the futures trading just exploded 

in our community and our media and in our marketplace. 

I had bakers lined up throughout in my office and out in the 

community wondering how they were going to buy rye and wheat 

and so on to keep their small and medium-sized businesses going. 

We were talking about the high price of gasoline. We were talking 

about something called the ‘‘London loophole’’ and how we needed 

to close that. 

So the whole issue of commodities we are seeing not only as 

something that was primarily an Agriculture Committee issue, but 

an American issue and how it affects our community. 

There is grave concern whether there was adequate oversight, 

adequate regulation, and what we needed to do. Well, I think now 

we are on the path in the right direction. But whatever the rules 

of the road, whatever Congress chooses to do, we need to have the 

right person in charge of the CFTC. That is why I enthusiastically 

endorse and introduce Gary Gensler to the Committee to be the 

Chairman of the Commodity Futures Trading Commission. We 

know his work when he was in the Senate. We know his work in 

the Clinton administration, and also he is and continues to be a 

community leader in Maryland. 

I know him to be a man of principle and great intelligence. He 

has a deep understanding of finance, both domestic and international, and how to turn that knowledge into workable policies 

that will protect the interests of our country and the interests of 

our consumer. 

During this time of great financial turmoil and uncertainty, we 

need someone with these skills, this background and experience, 

and these values to lead the Commission. So I enthusiastically support him for this important position. 

When you look at his resume, we know that he worked hard at 

Treasury and received the Alexander Hamilton Award, the highest 

award that the Department can give. He worked with our colleague 

Senator Sarbanes in terms of fashioning a response to not only the 

Enron scandal, but how we could make corporate America more responsible, the Sarbanes-Oxley bill. 

He has worked as a top economic adviser both in our own government and on Wall Street. He is also a strong community leader. 

Whether he has been on the board of Johns Hopkins University or 

whether he has helped the Community Enterprise Foundation be 

able to provide affordable housing, Gary has always been someone 

who has given of his own time and, I might add, of his own dime. 

And just speaking as a woman, I watched him and my heart 

went out to him when his own beloved wife, Francesca, struggled 

with breast cancer. He had to be a father; he had to be a mother; 

he had to be a devoted husband. He was always at his wife’s side, 

and at the same time tending to his children. 

Someone who knows what sorrow is and has to go through that, 

and also what it means to his family, and then while he was doing 

that, to stay civically engaged while at the same time watching the 

marketplace. I think we have someone who brings talent, who 

brings dedication, and who brings values. I think the Committee 

would be well served in approving his nomination. 

6 

Chairman HARKIN. Thank you very much, Senator Mikulski, for 

that very strong supportive statement. 

Now our distinguished former colleague, Senator Sarbanes. Welcome back. 

Senator SARBANES. Mr. Chairman, thank you very much, and I 

appreciate your courtesy in allowing me to appear. It is a risky 

proposition on your part because former Senators do not get much 

of a chance to speak, and there is always a danger they will abuse 

the microphone when the opportunity presents itself. But I know 

you want to move along. 

Actually, I will withhold and defer to Ben and keep it in—I am 

out of office, and they are in office, and I respect the difference very 

much. Do you want to go ahead? 

Senator CARDIN. I usually yield to my constituents, and Senator 

Sarbanes is my constituent. But let me—— 

[Laughter.] 

Chairman HARKIN. Senator Cardin. 

STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR 

FROM THE STATE OF MARYLAND 

Senator CARDIN. Mr. Chairman, let me thank you for the courtesy of just a few remarks with regard to Gary Gensler. He is a 

friend. He is a person I have known for many years. I deeply respect his intellect, his integrity, his financial knowledge, and his 

commitment to public service. And I join Senator Mikulski and 

Senator Sarbanes in recommending him for confirmation. 

Gary has a tremendous depth and breadth of knowledge on financial issues. He was in the Department of Treasury from 1997 

to 2001, Assistant Secretary for Financial Markets and Under Secretary for Domestic Finance. He was a senior adviser to both Secretary Rubin and Secretary Summers. 

He received the Treasury Department’s highest award, the Alexander Hamilton Award. He was an adviser to a very distinguished 

member of the U.S. Senate, Chairman Sarbanes, when Paul 

chaired the Banking Committee and helped Senator Sarbanes 

when we passed the Sarbanes-Oxley legislation, which regulated 

corporate America—very important legislation on corporate responsibility—we could use more of that today—and accounting and security laws. 

So Gary is well prepared through his experience to take on this 

very important responsibility as Chair of the Commodity Futures 

Trading Commission. But I want to tell you just one more thing 

about him. His background in the community, the type of volunteer 

activities that he has committed himself to, in helping educational 

institutions and helping health care institutions and helping those 

who are disadvantaged. It tells you a lot more about him. He is a 

person committed to our community. 

I will tell you one more thing about him. He has participated in 

nine marathons, and if he is confirmed, helping repair our economy 

will be his tenth marathon, and I am sure he will be just as determined to bring us to a successful goal, and I encourage his confirmation. 

Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you very much, Senator Cardin. 

7 

Now Senator Sarbanes. 

STATEMENT OF HON. PAUL SARBANES, FORMER U.S. 

SENATOR FROM THE STATE OF MARYLAND 

Senator SARBANES. Well, thank you very much, Mr. Chairman. 

First of all, I want to just underscore something that both Senator Mikulski and Senator Cardin said, and that is the very substantial, positive contribution that Gary Gensler has made in the 

Baltimore community through his civic involvement. If we talk 

about being a good citizen and sort of participating and meeting 

your responsibilities, this is a prime example of someone who has 

done that. And it has been of enormous benefit to our community, 

and we are all deeply indebted to him for it. 

He has been in a sense a star from the beginning. He was a 

summa cum laude graduate from the Wharton School of Business 

at the University of Pennsylvania, first a BA and then an MBA. 

He then went to work in the financial industry where he had extensive experience, and then he was in the Treasury for, I think, 

close to 4 years. He then wrote a book about mutual funds, and 

then I was fortunate enough—I was then Chairman of the Banking 

Committee, and we were confronted with the Enron situation. 

Enron was the seventh largest company in the country. It was 

reporting record profits in the first part of 2001, first quarter, second quarter, 20–percent increase in profits each quarter. By October, they were restating their earnings. November, they restated 

them again. December, they declared bankruptcy. The largest 

bankruptcy in U.S. history up to that point. It was subsequently 

eclipsed by WorldCom in June of 2002. 

The Committee, which I then chaired, was charged with the responsibility of addressing the situation, and one of the things we 

did which made an enormous difference, as it turned out, was to 

get Gary Gensler to come and work with us as a senior adviser to 

the Chairman. And his contribution was enormous. 

He was integrally involved in shaping the legislation, which, of 

course, dealt with oversight of the accounting industry, the reform 

of corporate governance, and investor protection measures. And let 

me just quickly outline for the Committee the qualities he brought 

to that work, which I think will stand all of us in good stead should 

he be confirmed as Chairman of the CFTC. 

First of all, he thinks comprehensively in terms of what is necessary to make the financial system work. So he has a breadth and 

depth of vision which is somewhat rare, but which is extremely important, particularly when you are trying to deal with a situation 

where the system is breaking—seems to be breaking down and it 

needs to be, as it were, restructured and put back together again. 

He is extremely smart. I indicated his past accomplishments. 

Nowadays, people are around developing more and more complex 

instruments all the time, and you have got to have someone there 

who can not only stay with them every step of the way, but can 

be ahead of them, can anticipate what is coming and seek to address it. 

He knows the markets well, and he is very committed to ensuring that the markets work honestly and fairly. And the markets 

are an important part of the workings of our economic system. But 

8 

if they do not work honestly and fairly, they will drive the economic system down, and all of us will pay a very high price for 

that. 

He is very hard-working. He is not ideological. He is pragmatic. 

He is a good listener. He seeks practical solutions, seeks to develop 

constructive and positive approaches. He is firm and fair. And he 

brings excellent judgment and very strong leadership skills. I think 

he will be very effective in heading the agency and imparting a 

sense of mission to the employees in terms of what needs to be 

done. 

I want to say to the members of the Committee, I have absolute 

confidence in his integrity and in his judgment, and I think it is 

an opportunity for the country to put his superior understanding 

of financial markets and his extensive experience to work on behalf 

of the American people. I can assure you he will be a fierce enemy 

of fraud and manipulation, that he will find it, root it out, and also 

try to make the systemic changes that will contribute to it not recurring again, which is, of course, very important. We can go after 

the bad actors, but we want to have a system in place that precludes the bad actors from coming along in the first place. 

Gary Gensler has a very, very deep commitment to the public interest. I have had occasion to talk to him at length about his feeling for the country, his own opportunities in life, and the need to 

make the system work fairly for all. 

And, finally, Mr. Chairman, let me just say he appreciates, I 

think, the role of the Congress and the workings of our political 

system. Sometimes you get these people in the executive branch, 

and they have difficulty understanding there is a legislative branch 

that plays a very important role. Gary Gensler I think clearly understands the role of the Congress. I think he is sensitive to it. He 

appreciates it is an important partner. And I want to say to the 

Committee I think he will be an absolutely first-rate partner for 

the Congress as you move to address the economic challenges 

which you, Mr. Chairman, and the other members of the Committee outlined at the beginning of this hearing. 

Thank you again for the chance to come and be with you. 

Chairman HARKIN. Well, thank you very much, Senator Sarbanes. Good to see you back, and I am sure we do not have any 

questions for all of you, but I just would say for the record that Mr. 

Gensler is indeed very fortunate to have three such well-respected 

and well-liked advocates for his position as the two sitting Senators 

and the previous Senator from the State of Maryland. Thank you 

all very much for being here. 

Now I would like to call Mr. Gensler to the witness table. 

Mr. Gensler, before you take your seat, if you would rise, we 

have an oath that we have to administer. 

Mr. Gensler, do you swear to tell the truth, the whole truth, and 

nothing but the truth? 

Mr. GENSLER. I do, Mr. Chairman. 

Chairman HARKIN. And, Mr. Gensler, do you agree that, if confirmed, you will appear before any duly constituted committee of 

the Congress if asked? 

Mr. GENSLER. I do, Mr. Chairman. 

9 

Chairman HARKIN. Thank you very much, Mr. Gensler. Please 

have a seat. 

Mr. Gensler, welcome to the Committee. My congratulations on 

your nomination by the President, and we have your written statement. It will be made a part of the record in its entirety, and the 

floor is yours. You may proceed as you so desire. 

TESTIMONY OF GARY GENSLER, NOMINEE TO BE CHAIRMAN 

AND COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMISSION 

Mr. GENSLER. Chairman Harkin, Ranking Member Chambliss, 

members of the Committee, thank you for the opportunity to appear here before you today. I am honored to be President Obama’s 

nominee to be Chairman of the Commodity Futures Trading Commitment at this critical time in the commodities markets, and for 

our Nation. 

As a champion of the public’s interest—for farmers, consumers, 

small businesses—the CFTC plays an essential role in our financial 

regulatory system and affects the lives of all Americans. And I 

firmly believe that strong, intelligent regulation with aggressive 

enforcement is what our economy needs and benefits the public. 

The current economic crisis clearly has shown, though, that our 

financial and regulatory systems have failed the American public 

terribly. Those of us who have spent our time, our professional 

lives, around markets have to approach the current crisis with humility following such broad failures. We have learned the limits of 

our ability to foresee how markets may evolve. We have learned 

the importance of being candid with the American public about the 

risks we face and that we must be unceasingly vigilant to address 

these risks. We have also learned that there is no substitute for 

strong, independent regulation, that we must bring transparency 

and accountability throughout the system, and we must always err 

on the side of protecting the American public. 

These are the lessons I draw from what has transpired this past 

decade. And, if confirmed, I pledge to this Committee and to the 

Congress that I will not forget these lessons. 

We must repair our regulatory system by enacting much needed 

reforms that promote transparency, fairness, and safety. 

If confirmed, I will fight hard on four essential priorities for reforming the commodities markets and our financial system. 

First, the CFTC must vigorously fulfill its mandates: enforcing 

existing laws, promoting market integrity, preventing against fraud 

and manipulation, and guarding against excessive speculation. I 

will work tirelessly to ensure that the Commission leaves no stone 

unturned, ferreting out and putting to a stop activities and practices that hurt the American public. 

I also look forward to working with Congress to provide the adequate resources for this agency which I believe currently lacks the 

sufficient funds to do even its current mission, let alone the missions I think it needs to take on. 

Second, I believe that increased speculation in energy and agricultural products hurts American farmers and consumers and businesses. I do not have any doubt about that. A transparent and consistent playing field for all physical commodity futures should be 

10 

the foundation of our regulations. Position limits must be applied 

consistently across all markets, across all trading platforms, and 

exemption to them must be limited and well defined. 

Third, we must now urgently develop a broad regulatory regime 

for over-the-counter derivatives. Standardized products need to be 

brought into mandated clearing and mandated exchanges. Beyond 

this, I believe the institutions themselves—the derivative dealers 

that make the markets in derivatives—need to have direct regulation under Federal statute, capital rules, business conduct reporting, and regulations need to be developed for customized swaps and 

for credit default swaps given their unique nature. 

And, fourth, I believe the CFTC must work with Congress and 

other regulators around the globe to ensure that failures of the regulatory and financial systems, failures that the American people 

public has taken such a toll, never happen again. Now, this will not 

be easy. These are complex financial markets, and markets are irreversibly linked. But we will have to work with our global partners to make sure that around the world we have the same rules 

that we have here. This is the only way that Americans can really 

be protected. 

Mr. Chairman, Ranking Member Chambliss, I am a proud believer in financial reform, tough regulation enforcement. I have 

been privileged to have had broad exposure to financial markets, 

here and in Asia, in public service and on Wall Street, as an investor advocate, and as a Government official. 

And my experience has taught me the importance of having a 

strong working relationship with Congress. I appreciate Senator 

Sarbanes’ comments on that. In these transformational times, I do 

believe we have a unique opportunity working together to bring 

bold and necessary reform forward. We must, though, take this opportunity to ensure we deliver on the expectations that all Americans have for us. 

I would like to close by saying how much the support of my family—my three daughters—means to me, and the great sacrifices 

they will make if I am so honored to serve. My eldest, Anna, is a 

freshman at college and could not be here. My two other daughters, 

Lee and Isabel, if it would be appropriate, I would just like to introduce to the Committee. 

Chairman HARKIN. Please introduce them. 

Mr. GENSLER. This is Isabel, my youngest, who is 12, and then 

my daughter Lee, who is 17, who are here with us today. 

Chairman HARKIN. Welcome to the Committee. 

Mr. GENSLER. Mr. Chairman, Ranking Member Chambliss, members of the Committee, I look forward to taking your questions. 

[The prepared statement of Mr. Gensler can be found on page 43 

in the appendix.] 

Chairman HARKIN. Thank you very much, Mr. Gensler. 

Mr. Gensler, in confirming nominees and moving their nominations forward, I like to know about their background and history 

and where they are now, their present views and outlook. Obviously, you have had experience, you have served in a previous administration. I would like to cover some of that with you as a way 

of examining where we were in the late 1990’s and where we are 

today regarding issues under CFTCS jurisdiction. 

11 

On May the 18th, 1999, you testified before the House Agriculture Committee’s Subcommittee covering risk management. In 

response to questioning by our distinguished ranking member, 

when he was a member of the House Agriculture Committee, you 

said you ‘‘positively, unambiguously’’ agreed with Mr. Larry Summers in his testimony to the Senate Agriculture Committee opposing additional regulation of the institutional over-the-counter derivatives market. 

You went on to refer to the ‘‘vibrancy and importance’’ of the 

global over-the-counter derivatives market. 

Here is a direct quotation. You said quote, ‘‘That large and vibrant market is part of, I believe, the American success. And we 

should recognize that and put the burden on those who are suggesting changes and further regulation, put the burden on them before we tamper on some of the successes of this marketplace for the 

economy.’’ 

Well, that is quite a resounding, unqualified, and categorical 

statement, no second thoughts or ambiguity. 

Ms. Brooksley Born, who was about to leave as the Chairperson 

of the CFTC, had advocated strenuously over the previous few 

years, including before this Committee, that the risk of these overthe-counter derivatives needed to be evaluated and appropriately 

regulated. 

However, you were part of the team arguing—and you can correct me if I am wrong on that—for a statutory enactment to take 

away all CFTC regulatory power over these over-the-counter derivatives. According to the Washington Post of October 15th, 2008, 

this team was really quite dismissive of Ms. Born, to the point of 

it kind of becoming personal at that time. But I do not need to go 

into that. 

But this team was quite direct in advocating that these be exempted from CFTC regulation. 

Mr. Gensler, what was your own personal role in dealing with 

Ms. Born during the time she was chair of the CFTC? Did you attend any meetings during that period of time in 1998 or 1999 or 

did you have any telephone calls or communications over that period of time with her? What was the nature of those interactions, 

and did you have any advice for her at that time? 

Mr. GENSLER. Mr. Chairman, thank you for your question. 

First, may I say, looking back now it is clear to me that all of 

us that were involved at the time—and certainly myself—should 

have done more to protect the American public through aggressive 

regulation, comprehensive regulation. We should have fought harder for some of the things that we raised with Congress at the time, 

whether that be regulating derivative dealers or keeping the oil 

and metals markets consistently regulated with the corn and wheat 

and soybean markets. These were things we recommended and we 

should have fought harder for. 

I clearly look back on some things outside the jurisdiction of this 

Committee that I should have fought harder for, guarding against 

predatory lending practices. 

I believe there are many things that at the time that we could 

not foresee, or did not see. They were just dots on the landscape, 

12 

as you, I believe, and other Senators here commented. And we have 

to do a far better job seeing that which is out on the horizon. 

You asked specifically about meetings with Chairman Born and 

I recall working with her, working with her as a staff member at 

Treasury. I was an Assistant Secretary working on a report on 

long-term capital management and the after effects of the collapse 

of long-term capital management where there was a joint report 

put together in the spring of 1999. 

During those earlier periods of 1998, when there was different 

views of the Treasury, the Federal Reserve, and the SEC from the 

CFTC, Ms. Born raised very good questions but I, in fact, at the 

time was recused because it did relate to a particular matter of my 

former employer. I had been at the full, big set piece President’s 

Working Group meetings, as would be customary for the Assistant 

Secretary to attend, along with other staff of Treasury. 

Chairman HARKIN. Well, Mr. Gensler, that is a very straightforward answer and I appreciate that. So would you say that your 

views and your thoughts on this have evolved and changed over the 

intervening years, looking back at what has happened in the last 

several years? 

Mr. GENSLER. Mr. Chairman, I very much would say that my 

views have evolved. There is so much that has happened in the 

marketplace as electronic trading facilities, even that our exchanges now are public and for-profit enterprises and back then 

were not for-profit and public. And the financial crisis itself, to me, 

goes to the heart of some of the assumptions that I think collectively all of the Federal agencies and even Congress at the time 

grappled with. 

I believe now it is just so important that we bring the whole 

over-the-counter derivatives marketplace on the market, into exchanges, as you do. I share that goal. And to also bring that overthe-counter derivatives marketplace onto centralized clearing. 

I, frankly, though do not think that is enough. I also think we 

need regulation of the institutions, that Congress would actually 

have a statutory regime for derivative dealers, somewhat like we 

have for banks, where you have capital rules which address the excess leverage, have business conduct rules to make sure there is 

not fraud and manipulation in the sales practices. And then, of 

course, last and very importantly, reporting rules. These dealers— 

there is about 15 or 20 around the globe that make up 99 percent 

of the market for over-the-counter derivatives. 

So I have come to believe strongly we need both, the market side, 

clearing and exchanges for the standardized products, the derivative dealers clearly regulated, all the information coming in. 

Chairman HARKIN. I am going to follow that up in my second 

round because I want to ask about this whole idea of having some 

derivatives that are not on a regulated exchange. I will get to that. 

In my reading, my memory but also my reading of that period 

of time from 1998 through about 2000, was that the President’s 

Working Group was very forceful in their position that these OTC 

derivatives should be exempted from the CFTC. As I said, to the 

point one time where it also got personal with Ms. Born. I remember that. 

13 

And in my reading of it, about that, from various sources, it appears, of course, that you have some very strong personalities 

there. You have Mr. Greenspan, who was driving this, quite frankly. And he is a very forceful personality. He was driving this. 

Then you have Mr. Summers. He is no shrinking violet, as we 

all know. He was driving this, also. 

Then you have Mr. Rubin there, also. So you have a very forceful 

group. 

CFTC was sort of shunted aside. Well, Mr. Gensler, should you 

get this position as the Chairman of the CFTC, you will be on the 

President’s Working Group. And I needn’t remind you that you will 

not be working for Mr. Geithner. You may be a friend of his; that 

is fine. You will not be working for him. You do not work for Mr. 

Summers. You do not work for Mr. Bernanke. You are the chairman of an independent regulatory agency. You do not even work 

for the President. You are chairman of an independent regulatory 

agency. 

And as such, your views and your positions that you have should 

be that of a chairman of an independent agency. And one should 

not be reticent in advocating a position even to the extent that 

some of the other forceful personalities may not agree, if you get 

my point. 

I just want some assurances from you that you will be that independent voice. Like I said, I am not asking you to sever friendships 

or the like. I am saying the mindset, the mindset of the Chairman 

of the CFTC cannot be working for Mr. Summers or Mr. Bernanke 

or Mr. Geithner or anybody else. And that you will bring that independent mindset to the President’s Working Group. 

Mr. GENSLER. Mr. Chairman, I thank you for that question. I 

think being Chairman of the CFTC is an independent regulatory 

agency. The commitment I give this Committee and to the American public that I will bring that independence. If I have a concern 

or thought about the regulatory protections that the American public needs, I will absolutely share it as one of the President’s advisors, as part of the President’s Working Group, with the President 

and senior members of his economic team. 

But if we cannot reach any consensus and I believe something, 

I am going to bring it to this Committee, I am going to bring it to 

the American public. There is a real difference, in my mind, of 

being an Assistant Secretary of Treasury and being the chairman 

of an independent regulator. 

I appreciate that when the President asked me—then PresidentElect Obama—to be his nominee in December and we had a chance 

to chat, that was what he understood and that is what I understood, that I will certainly be advising the President. It would be 

a great honor to advise him on regulatory reform and all that we 

need. 

But that which is at the core of my beliefs, that we have to bring 

the entire over-the-counter derivatives marketplace into a regulatory regime, these two pieces that I have talked about, these two 

big pieces I have talked about and the goals that we share, they 

have heard me saying this straight through since December 18th 

and they are going to keep hearing me say it. And I make that 

commitment to you, sir. 

14 

Chairman HARKIN. Thank you very much, Mr. Gensler. I will return to the issue of derivatives and trading on exchanges during 

the second round. 

With that, I would of course yield to our distinguished ranking 

member, Senator Chambliss. 

Senator CHAMBLISS. Thank you, Mr. Chairman. 

Mr. Gensler, in your statement you state, and I quote, ‘‘The current economic crisis clearly has shown that our financial and regulatory systems have failed the American people terribly.’’ 

I know you are very familiar with the workings of the CFTC. 

Surely you have followed the markets over the last several years 

since your direct involvement at Treasury. Is there anywhere that 

you think, or any particular instance you think where CFTC falls 

into that category of having failed the American people terribly? 

Mr. GENSLER. Senator Chambliss, I think that the great failures 

are largely beyond the CFTC. But even in this area, the CFTC is, 

by Congress, that Act in 2000 that the Chairman referred to, asserted that they are an agency that has to look after systemic risk 

as well. And we clearly have had a systemic failure. 

Second, though the CFTC, I do not think, has the tools to look 

after that much, I do believe that we have had speculation that 

contributed and hurt farmers and consumers and all Americans. 

And if confirmed, I would fight hard to make sure that we have 

the resources and that we can bring what is needed to be borne to 

these markets within the current authorities at the CFTC. 

Senator CHAMBLISS. With the current authority that is out there 

and the current resources that you are familiar with, do you think 

there is anything that the CFTC did not do that they should have 

done relative to this systemic risk issue that you are talking about? 

Mr. GENSLER. Well, again, when the failure is so broad and complete, Senator, I just think all regulators have to look into themselves and say what could we have done differently? I do that personally, in terms of my own record. 

I think that the CFTC has aggressively fought and tried to enforce fraud and manipulation in other areas. But if confirmed, I 

would certainly want to take a look at all of the individual hedge 

exemptions that are currently in place, some for 20 years or so. I 

think it is time to look back and see whether those exemptions are 

still appropriate, given the current times. 

There are processes that the CFTC uses to allow for markets or 

individuals to take action sometimes that are not brought up to the 

full Commission level, and I think we need to do that, as well. 

So these might sound like they are around the edges of a big financial calamity, but I think every agency needs to take a look to 

see what can we do better and what can we do more. 

Senator CHAMBLISS. You and I talked about the potential for an 

SEC/CFTC merger that a lot of folks are advocating and have been 

advocating. And I noticed you are quoted, and I hope this is an accurate quote, ‘‘CFTC performs vital functions and it is critical that 

all of its mandates are preserved, even as the demands on our regulatory agencies expand. A merger makes sense only if it enhances 

our ability to carry out the important task with which the CFTC 

is entrusted. Thus, I would not consider a merger simply for merger’s sake.’’ 

15 

I want to say that on the vital function of the CFTC, certainly 

you and I are very much in accord there. There has been much discussion about merging these two agencies, as well as the creation 

of a new systemic risk regulator to oversee all Federal financial 

regulators. 

Personally, I have great reservation about bringing these two 

regulatory bodies together, as I expressed to you. For one, the 

SEC’s performance in regulating their current portfolio has been 

less than stellar. And second, the CFTC uses principle-based regulation that has proven an effective approach to regulating commodity futures. It is difficult for me to see how welding these two 

regulators together will serve Americans well. 

First, are you a proponent of the CFTC’s principle-based regulatory approach? And if so will you, as Chairman of the CFTC, 

work to preserve this regulatory approach, as regulatory reforms 

and reshuffling of bureaucratic boxes are contemplated and proposed? And second, what problems could you see arising from an 

SEC/CFTC merger? 

Mr. GENSLER. Senator Chambliss, I appreciated the time we 

spent in your office. I think we may have talked about this as well 

at that moment, too. 

As I said, and that was an accurate quote, I think this financial 

crisis brings to bear so many other problems other than, as you 

say, the boxes. The CFTC was formed in 1974, but really it was 

formed back in 1922 to protect the interest of—at that time—grain 

merchants and farmers so that they could appropriately and reliably hedge their risk in the future about their corn and wheat and 

then later soybean. And of course, we have added many other products to it. 

I think that is fundamentally very different than what the SEC 

does. They are both market regulators. They both need to be strong 

on enforcement and anti-fraud and anti-manipulation, and look out 

for the public. 

But at the core, the CFTC’s mission about protecting farmers 

and merchants and later oil and metals, and though it has been expanded to financial products and it is critical to get the over-thecounter derivatives marketplace correct as well, is sort of around 

a different set of mission and goal than that which is the SEC. 

I think both very vitally important. And as you rightfully point 

out, one of them principles-based which, as Chairman of the CFTC, 

I would support and make sure it works. And if it did not work, 

I would be back here readily to work with Congress to see if we 

needed to fix something. And the Securities and Exchange Commission has another approach. 

Senator CHAMBLISS. The 2000 Modernization Act was a very 

complicated piece of legislation that you were involved with back 

then, as were a number of us. We thought we were doing the right 

thing and I think we did absolutely the right thing by allowing the 

market to expand and putting more flexibility out there. As a result we saw these markets grow in a tremendous way. I think all 

of that has been healthy for the economy. 

Obviously, as you alluded to, over the last 10 years—or well, 9 

years we have seen major changes in the industry. We have seen 

16 

very volatile prices from time to time which can be attributed to 

any number of issues. 

But my question to you is looking back at the 2000 Act, and 

knowing what you knew then, is there any recommendation that 

you think was made that we did not follow that should have been 

followed that we ought to think about now? Or do you think that 

act worked the way that all of us intended for it to at that time? 

Mr. GENSLER. Well, I believe, looking back now, knowing what 

we know now, there are two areas that we did raise then but we 

should have fought harder for, I personally felt—thank you, Senator—should have fought harder for. 

One was the concept of regulating the dealers themselves, the 

brokers, the voice brokers or derivative dealers that are making 

markets. We all know their names. I will not name them here, but 

the large financial institutions. 

We recommended that. In some cases, they were the affiliates of 

the broker-dealers. But one of the big lessons out of AIG, the insurance company that failed, they had an unregulated dealer in the 

derivatives business. And now, in that case, it was $450 billion in 

size. In that case, it was largely credit default swaps. But it was 

also unregulated. There was no, not the New York State Insurance 

Commissioner, nor any Federal regulation about its capital, its 

business conduct, its reporting. I think we need to put that in 

place. 

Second, at the time the President’s Working Group did suggest 

and recommend that oil and metals and cotton and wheat all have 

a consistent regulatory regime. We were unable to achieve that, 

working with the various committees in Congress in working that 

through. 

But I think that is a good foundation. I still think that is the 

right foundation, that if something has finite supply and is more 

easily manipulated, that we should think of consistent regulation 

and make sure that we get that in. 

Senator CHAMBLISS. Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you, Senator Chambliss. 

Senator Lugar. 

Senator LUGAR. Thank you, Mr. Chairman. 

You have just mentioned, Mr. Gensler, the ideal of having the 

agricultural commodities but likewise, a broader group together. 

Certainly in testimony that we heard in October and before many 

advisors, even to pension funds and to college endowment funds, 

suggested a grouping of commodities which included corn and soybeans but also metals and oil and these combinations of commodities that serve those interests well for a period of time. 

But it did lead to an interesting question with regard to regulation of them, and it is a discussion that we had at the time of the 

reauthorization of CFTC a while back which, without going into 

who was for and against, the problem of the regulation of oil, for 

example, or of various other energy products, was fiercely resisted 

by some Senators, by some witnesses, by some members of the Administration at the time, as I recall. 

I mention that now because I really want your judgment as to 

what should be the scope of the CFTC? We think about the agricultural scene, that seems fairly clear. It has never been quite that 

17 

clear with regards to other commodities, as they are thought of 

generally. 

What sort of scope do you envision as ideal, in terms of a regulatory regime? 

Mr. GENSLER. Senator, I thank you for the question and I thank 

you for having—we had a good meeting together on these subjects. 

I think that the Commodity Futures Trading Commission currently has exclusive jurisdiction from Congress to regulate the futures markets. And it has proven well, as Senator Chambliss said, 

though in the midst of a crisis everybody has to look within. It has 

proven well in regulating over these 35 years the futures markets. 

I believe that if we are able to bring over-the-counter derivatives 

into centralized clearing, into exchanges for these products, that 

the CFTC is best situated with expertise on the derivatives marketplace, if appropriately funded I must add. But I think they are 

best situated amongst the Federal regulators for these authorities. 

Senator LUGAR. Now the appropriately funded point which you 

touched upon in your opening remarks, and which has often been 

touched upon by the leadership of the Commission, just has not 

been occurring. There is not an understanding I think, perhaps, of 

the scope of what this means if you are to take in all of the different types of derivative contracts and various other situations. 

From the beginning will you be able to give the Committee and 

work with us in terms of how many people you actually need or 

what sort of facilities are required to achieve something which the 

American people clearly want at this point? 

Mr. GENSLER. Senator Lugar, I look forward, if confirmed, working with you and the Committee on that. I know under its current 

authorities the CFTC has just under 500 people. This is the same 

size it was in 1974. 

Senator LUGAR. Yes. 

Mr. GENSLER. So in 35 years, when the markets have grown 

more than 50–fold—again, markets have grown 50–fold, the agency 

is the same size. That is either efficiency or well, or it is underfunded. And maybe it is some of both, but I think it is underfunded. 

It was 600 people just a few years ago. The enforcement arm had 

150 lawyers, it is now only 110 lawyers, just to enforce the laws 

currently in place. 

I believe the Agency has put a request in, and I am a private citizen but I was able to read this letter in the last few days, to get 

back up to 690 people. That gives you a sense of what they believe 

right now they need. 

Senator LUGAR. I think it is probably incumbent upon us, but 

you if confirmed, to gain greater recognition for what the CFTC 

does. I think it has always remained in the shadows. But no longer. 

We have a financial crisis that still goes on. 

Let me add one further thought, as you are thinking about the 

budgets. I have no idea what the result will be of our debates on 

energy resources, climate change. But let us say that a cap and 

trade system was established in this country in which there was 

really a very conspicuous and very expensive market for carbon. 

I ask sort of in advance what your judgment would be as to 

whether the CFTC should be the agency that regulates huge sums 

18 

that are likely to be involved if a very serious cap and trade situation involving all of our industries, utility, so forth, was to come 

about? 

Mr. GENSLER. Senator Lugar, I believe under the current statutory authorities that the CFTC does have that oversight, and there 

is a very small cap and trade market now I am told, regional market, that they have some oversight. 

Senator LUGAR. Yes. 

Mr. GENSLER. If that were to grow into a national market, be 

listed on an exchange or in other ways, the CFTC, I have been told 

in my early investigation, does have that authority. But I would 

certainly look forward to working with Congress if we need to put 

more of that into statute and address that specifically. 

Senator LUGAR. Let me just ask as a personal inquiry, I have become a member of the Chicago Climate Exchange, largely as a 

demonstration that farmers who have hardwood trees and have 

proper measurement and so forth are sequestering carbon in their 

trees. And each year we have an update of how much more is 

there. 

So on the website of the Chicago Climate Exchange, every day 

there is a quote for their price of a ton of carbon. It is $1.95 today. 

It was up to $7 at one point during the year. 

Similar situations in Europe, however, have had quotes of anywhere from $20 to $50 per ton, depending on the Kyoto Protocol 

and how seriously some countries looked at this. 

I mention this because there is, as you say, a modest attempt 

being made by people in Chicago, who also are working with the 

Europeans in this. And it may come to pass that the Congress debates this issue but puts it aside, as was the case last year. 

But if we do not put it aside, this is going to be a very, very large 

set of problems and sums of money and implications for something 

well beyond agriculture or speculators in commodities. And that is 

why I wanted to try to establish who is responsible. And your judgment, and I agree with it, is that it is the CFTC. 

But having the personnel, the regulations, the rest of it for this 

is sort of a quantum leap and is the type of thing which hopefully 

we will not look back in a hearing 10 years later and say why did 

we have no vision, no preparation, and no people. 

Mr. GENSLER. Right. And Senator, I think you raise a very good 

point. The Commodity Futures Trading Commission has the best 

experience and background and current authorities regulating the 

futures markets. 

But just as it does also work with the Department of Agriculture 

that has the best authorities and expertise on agriculture and the 

cash markets and so forth. So there is some shared protection of 

the American public between the Department of Agriculture and 

the CFTC in corn and wheat and other products, where the CFTC 

is focused on the futures. 

There may well be multiple agencies in a cap and trade situation 

where the CFTC brings its expertise to protect the American public 

in the futures markets and other agencies bring their expertise to 

protect the public in other regards. 

Senator LUGAR. Thank you. 

Chairman HARKIN. Thank you, Senator Lugar. 

19 

Senator Stabenow. 

Senator STABENOW. Thank you very much, Mr. Chairman. 

First of all, welcome and I look forward to supporting your nomination. 

Mr. GENSLER. Thank you, Senator. 

Senator STABENOW. Is this microphone on? It is not working. 

Well, I am going to move over here, just a second. We will see if 

this one works. 

OK, that is working, and I am not Senator Conrad. 

Welcome again, and I will say for the record, with the microphone on, I look forward to supporting your nomination on the floor 

and to working with you. 

I wanted to follow up with Senator Lugar, I think, what Senator 

Lugar was speaking about, the engines of cap and trade, which I 

think is such an important new area for us to focus on. President 

Obama spoke about it last night. We know that there is a lot of 

work being done, important work, being done to craft the right 

kind of balance for moving forward to tackle this issue, which I 

hope we will do. 

And some believe this will create the largest derivative market 

in the world. So there are a number of questions that I have in 

terms of how we approach this. It is a real opportunity, I think, to 

design a transparent, efficient, carbon market that builds on the 

practices for market regulation that we have. 

So I am wondering what you believe the lessons are that we have 

learned from other financial markets that would guide us, guide 

Congress and Federal regulators as we design a new carbon market? 

Mr. GENSLER. Senator, first let me thank you for the support and 

confidence you have in me in this nomination, and that means a 

great deal to me. 

As I indicated, the carbon markets and the cap and trade markets may grow. The CFTC does have expertise in terms of the futures markets. And though I have not studied these issues in any 

depth, let me just mention a couple of things. 

I think that it is important, just as in other futures markets, to 

make sure that we have a transparent marketplace. So if there is 

a design of a contract, as there is design of contracts in corn and 

wheat and oil and so forth, design of contracts that there is some 

transparency and there is a marketplace where it trades, there the 

public can see and corporations can see that marketplace and have 

the benefit of that transparency. And that there really are protections, just as there are in other futures, from fraud and manipulation. 

But there may be things that are specific to this market that I, 

if confirmed, would look forward to working with you and your staff 

and this committee to better understand and better advise you as 

you go forward. 

Senator STABENOW. Thank you. 

This may be something, as well, that you have not focused on 

specifically regarding carbon. But there is another issue related to 

that which relates to bonafide hedgers and what is a bonafide 

hedger in this contact. And I would be interested in knowing if you 

have any thoughts on a definition or what the CFTC and the ConVerDate Nov 24 2008 00:48 Mar 02, 2010 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 C:\DOCS\54564.TXT SAG2 PsN: SAG2
20 

gress should do relative to this issue when we think about the nascent carbon market. 

Mr. GENSLER. Senator, I think that all of the markets that the 

CFTC has oversight for, futures markets and hopefully these other 

over-the-counter derivatives, where there is something of finite 

supply, it is susceptible, that underlying product is susceptible to 

both manipulation, corners—what is called corners and squeezes. I 

am old enough to remember when the Hunt brothers cornered the 

silver market. I know the lack of hair, but I remember that. 

And I am not familiar enough with the carbon markets, but I 

think that is probably a market that would fall into this category 

which is susceptible to some finite supply. 

And also, the position limits are critical to protect against excess 

speculation. Hedgers need the benefit of speculators on the other 

side. We have had, for 130–plus years, contracts in the futures 

market and hedgers want somebody on the other side to take a 

risk. But there is a burden if it gets so excessive, and we saw that 

volatility in the last several years. 

So I think as it relates to this new market, the lessons of guarding against manipulation, guarding against excessive speculation 

would inform me, as Chairman if confirmed, and quite possibly inform Congress as to thinking about a regime in the carbon market, 

as well. 

Senator STABENOW. Thank you. I look forward to working with 

you on this issue. We have a number of different discussions we 

need to have that relate to regulating carbon, how this is going to 

be done in a transparent way, how there is accountability, how 

we—again, as you indicated, make sure that we are doing everything we can to deal with speculation in the marketplace driving 

up costs and so on. 

So I think there is a very important opportunity and role going 

forward for the CFTC in this whole discussion, and what I hope 

will end up being a strategy for us to be able to address the issue 

of carbon and cap and trade. 

Mr. GENSLER. Senator, if confirmed, I look forward to working 

with you on that. 

Senator STABENOW. Thank you. 

Chairman HARKIN. Thank you very much, Senator Stabenow. 

Mr. Gensler, I had this chart prepared here. No, I am not Senator Conrad. 

[Laughter.] 

Chairman HARKIN. He sits right there. That is an inside joke referring to Senator Conrad’s use of charts. 

But this is the oil market from 1997, here is 2007, and here is 

the price spike of last year coming back down here to about $40, 

maybe a little bit less than $40 a barrel right now, somewhere in 

that neighborhood. So the consumers see this and they suspect 

something is wrong with this big spike. There really wasn’t less oil. 

In fact, if anything, we were beginning to see the situation improve 

in Iraq, and Iraq has significant oil reserves. So it really wasn’t a 

lack of a supply. 

So if these wild price swings are not a function of normal market 

factors, how is that explained to the public? As Chairman of the 

21 

CFTC, how would you explain something like this to the public 

that happened last year in oil? How would you explain that? 

Mr. GENSLER. Mr. Chairman, I think that we had an asset bubble in the oil markets, an asset bubble even in other commodity 

markets. To the American public, I would say, as we saw—— 

Chairman HARKIN. Explain that asset bubble as it regards this. 

Mr. GENSLER. Well, similar to in the housing market, but driven 

by different factors, but just as the housing market, housing prices 

went up beyond what one might have said was the underlying cost 

to build the homes and so forth. In this marketplace, I believe that 

we had a great many people come to the conclusion that it is another asset class. The stock market is someplace you can invest. 

Maybe the bond market is someplace you can invest. Now the commodity markets is a third place one might invest to diversify risk, 

and there are great theories of diversification and theories I generally believe in. 

But that risk diversification led some investors to try to invest 

in commodities and I think over this period, just before the runup, but over the period from 2004 to 2007, that some statistics that 

I saw, that increase of outside investors, and I have said publicly 

and I will say again here I believe that investors that were investing as an asset class, whether they were index investors or hedge 

funds or other financial investors around the globe, not just here, 

had the perception that this price was just going to keep going up 

so that the—they were wrong. They were terribly wrong. But as a 

factor in that, the American public was hurt. I mean, it was terribly hurt by this speculative bubble. 

Chairman HARKIN. So I could substitute speculators for the word 

‘‘investors.’’ You use the word ‘‘investors,’’ but they were speculators. They were speculating on this market continuing to go up 

all the time. 

Mr. GENSLER. That is true, like some people speculated on home 

values or some people speculated on real estate or other things. 

Chairman HARKIN. This is something that I have wrestled with 

since I first came here in 1975 to the House Agriculture Committee 

and that is the role of speculators. The term speculator has a bad 

connotation. So what is the proper role for a speculator in a market? I don’t care whether it is oil, it can be grains, it can be metals. 

What is the proper role? Is it beneficial? And how do you explain 

to the consuming public, most of whom, if you ask them should 

speculators be driven from the market, would say yes—nine out of 

ten, I bet, would say that—so how do you explain, what is the beneficial role of speculators? 

Mr. GENSLER. I think at the history and the core of the futures 

markets, going back to the 1870’s, in fact, when a farmer wanted 

to have a reliable price for corn or wheat that they might want to 

sell at the end of the harvest and know how much money they 

would have to plant their fields, on the other side of that transaction, there needed to be somebody who was willing to bear risk, 

almost like writing insurance. 

So for 130 years, since futures started trading, we have had a 

concept, and I believe it to be the right one, sir, where commercial 

interests, farmers, ranchers, and then later oil producers and natural gas companies and grain elevators and so forth, all wanted to 

22 

have a reliable price for their product so that they can make business decisions.21Well, on the other side, then there is somebody in 

essence writing—taking on that risk. It is not an insurance company. In fact, it is somebody we call a speculator, somebody who 

is taking a position on the other side. 

What is at the heart of the CFTC authorities dating back to its 

founding is that that is to be allowed, but we also want to protect 

against excessive speculation and the burdens of excessive speculation, and there is a whole regime of position limits to limit that, 

and there is also clearly an important public interest to protect the 

American public against manipulation in markets. And sometimes 

when you see spikes like this, you say it broke down. What was 

happening may have broken down. 

Chairman HARKIN. Could the CFTC have started to do something in here to stop that speculative bubble in oil prices? 

Mr. GENSLER. I believe that all of these products need a consistent regime of position limits and those position limits should 

apply around the globe. The CFTC, in working with Congress, has 

addressed a number of these features. In the farm bill last year, 

I believe, to the credit of this committee, working with other members of the Senate and the House, you put in place a way to close 

part of that. There is also things that the CFTC has done subsequently, working with the regulators in London to try to address 

some limits so there is more transparency and that limits, where 

they are in place, apply to all markets consistently around the 

globe. 

Chairman HARKIN. Well, at least with the oil market, you could 

see it happening. But I would like to turn, if I could, to over-thecounter derivatives, which really is an opaque market and which 

you can’t see happening. First of all, would you agree or slightly 

agree or disagree with the statement that derivatives are more like 

futures contracts than just about anything else. Is a derivative a 

futures contract? 

Mr. GENSLER. Senator, a future is actually technically a derivative. A derivative is just a broader term, and I believe that all of 

these products have great similarity. So I think that hopefully answers the question. And what they have similarities is that they 

derive their value from some other product. A future derives its 

value from the corn or wheat or—— 

Chairman HARKIN. That is a future. That is right. 

Mr. GENSLER. That is a future, and an over-the-counter derivative derives its value possibly also from corn or wheat or oil or it 

might be from underlying interest rates. So they are very similar 

products. They are all forms of financial instruments that derive 

their value from some underlying feature. 

Chairman HARKIN. OK. And a derivative’s value basically depends on something happening in the future. A derivative is tied 

to something either happening or not happening in the future. So 

I always think of derivatives trading as a futures market. So, 

therefore, why should they be exempted? Why should they be exempted from the CFTC? 

Mr. GENSLER. Mr. Chairman, I believe that the entire over-thecounter derivatives marketplace, we need to bring those standardized products onto centralized clearing, and we get a great benefit 

23 

from centralized clearing and we will lower the risk in the system 

and add to transparency. We actually attempted to do some of this 

8 years ago and there was a voluntary clearing mechanism that 

was in that bill. I believe now it should be mandated for interest 

rate product, currency product, commodity product, credit default 

swaps, and the equity products, the whole regime. 

I also think the standardized products, we get great benefit from 

the transparency that can come from being on exchanges. There 

are some exchanges for these derivative products, but we can get 

a great deal more benefit from transparency from bringing those 

standardized products onto exchanges. 

Chairman HARKIN. Help me think through this. I have a concern 

that you keep using the word ‘‘standardized,’’ and I saw that in 

your response to questions asked of you by both Senator Cantwell 

and Senator Levin. And you referred to it a number of times here, 

about the standardized credit default swaps for example, standardize. 

But it seems to me that if someone wanted to trade in an overthe-counter derivative market and not on a regulated exchange, 

they could simply do little things to make the contract customized, 

and you can’t, in all your wisdom, define every little thing that 

could make it a customized rather than just a standardized swap 

or derivative. So how can you have both a regulated exchange for 

standardized, and then an over-the-counter for customized? How do 

you define what is custom? 

Mr. GENSLER. Mr. Chairman, I couldn’t agree with you more. I 

believe that is why we also need, working with Congress, to come 

up with a regime for the customized product. There is still commercial interest, whether they be a grain elevator or it can be an airline that wants a certain grade of jet fuel delivered on a certain 

day to a certain airport, and those dates and that grade of jet fuel 

and that airport may be different than a particular contract. That 

is customized. 

But at the same time, if we bring reporting to that and required 

reporting, required capital or margin requirements, and we level 

the playing field between that and what might be the standardized 

products, I believe that working together still allows the legitimate 

commercial interest to try to hedge in that little example a particular jet fuel at a particular date at a particular airport. 

Chairman HARKIN. Maybe there is something here I don’t understand, because I have thought about this a lot and I have read a 

lot about it. But it just seems to me that if you are going to close 

the loophole, you have got to put them all on a regulated change. 

If someone says they have got a custom deal, well, put it on the 

exchange anyway. Then we know what you are doing. 

Many thousands of contracts would avoid daylight by one little 

custom change. I have said before, if you and I want to swap something, you want to swap your tie for my tie, no one else cares. But 

if you own a whole portfolio of stocks and bonds and you want to 

swap that for my little piece of land someplace that may have tenants on it and things like that, well, then you see a lot of other 

people are involved in that custom swap. 

And I am thinking, why not just put those on a regulated exchange? And if you can’t do that, well, then you are just—you just 

24 

outlaw those customized kind of swaps unless they are willing to 

put them on a regulated exchange. 

Mr. GENSLER. Mr. Chairman, that is why actually I believe that 

we, in addition to what we are talking about, also bring a full regulatory regime to the dealers themselves, these large financial actors 

that deal in these markets. My fear, Mr. Chairman, of saying they 

are outlawed entirely is not only that which might hurt, whether 

it is a grain elevator in Iowa or whether it is an airline that wants 

a certain jet fuel on a certain date in a certain city, that they will 

find some other way. That is true economics. An airline wants to 

hedge that risk some other way that is then outside of the regime. 

So I think working with Congress, if confirmed, I would look forward to making sure that 100 percent is reported, that it is not 

opaque, that it is all brought in and aggregated into central data 

warehouses, which I know a number of Members of Congress have 

looked at and worked on, that there is no hole in the bottom of the 

boat that it all flows out of, but that the hundreds of products and 

the great majority of the products that are standardized are on exchanges, and if an exchange accepts it on the exchange, it has got 

to be on the exchange. And if the clearinghouse accepts it in the 

clearinghouse, it has to be in the clearinghouse. 

But we still—like you said, if we swap ties—and I do like your 

tie—but if we swap ties, Mr. Chairman, that it might well be that 

that has to be reported and we have to have capital charges for it 

but not have that on an exchange. 

Chairman HARKIN. I see Senator Klobuchar is here and I am 

going to yield to her. I have more to go into on the topic in a little 

more depth, but it just seems that once you have an over-thecounter market, derivative market for customized contracts, you 

can just about exempt anything. If I have a futures market that 

says the expiration date is July 20, but then I say, no, I need July 

21, does that make it a custom contract? Does that exempt it from 

exchange trading? That is what I mean. It just seems to me I can 

make any little change and all of a sudden I am exempt and can 

trade the contract over-the-counter. 

Now, you say, well, you report the trading anyway and so forth, 

but I am still not certain that gets to the nub of the benefit of putting the trade on that regulated change where every day it is 

transparent. One can know exactly what is happening and you 

don’t have these customized things drifting around out in the OTC 

market. I think you just open the door for proliferation of inadequately regulated OTC trading. 

Mr. GENSLER. Mr. Chairman, you and I share exactly the same 

goal, that we bring this whole marketplace into what I believe is 

two regimes. One regime is the centralized clearing in the marketplaces. The other regime is that the dealers themselves have serious regulation on capital, business conduct, and reporting, and that 

we rely on both to bring a marketplace that is very important and 

large into our economy, but under regulation. 

Chairman HARKIN. Thank you very much, Mr. Gensler. 

Senator Klobuchar? 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. We 

will have to leave the tie swap idea behind because I don’t have 

one. 

25 

Mr. GENSLER. Thank you, Senator. 

Senator KLOBUCHAR. But I wanted to congratulate you on your 

nomination. I appreciate, Mr. Chairman, that this nomination 

hearing was held in such a timely manner, given what we are facing here, how important it is, and that we need a cop on the beat 

to monitor commodity trading and giving us good advice about 

what to do with financial derivatives. 

I just noticed that the President at this very moment is holding 

a press conference on financial regulations and what he thinks 

needs to be done here. I have been just stunned by everything that 

has gone on here. I remember your predecessor, Mr. Lukken, when 

he appeared before our committee, and as a former prosecutor, I 

was giving him some ideas of the things that I thought maybe we 

could give to him as tools to use to improve things. 

We talked about staff improvements, which I think is important, 

or additional staff. But then we talked about this idea of more tools 

and he actually said, no, he didn’t want that tool. No, he didn’t 

want this tool. We talked about the London loophole or would he 

like more ability to go after certain things, and he said that he 

didn’t want that ability. 

I said, you know, as a prosecutor, you want—if you think a statute will help you with a certain group but you are not sure if you 

are going to use it, you still might want that statute. I just wonder 

how you would respond to that, because that is what most stunned 

me about that hearing. 

Mr. GENSLER. Senator, thank you for asking the question and 

taking the time at this hearing in your busy schedule. I absolutely 

believe the CFTC needs more tools, unambiguously. I believe it has 

to be a tough cop on the beat and strong on enforcement. We need 

more resources to do that. I mentioned to some others that the enforcement wing itself has 150 lawyers, was shrunk to 110. This is 

in a period of time that the futures markets went up sixfold in volume, in the last 8 years. 

But beyond that, I believe that we do, working with Congress, 

have a broad agenda, if I am confirmed, to try to get additional authorities to address some of the very real issues in the agriculture 

and energy markets and the over-the-counter markets to control 

some of the excesses that we have seen. 

Senator KLOBUCHAR. Well, one of the things we talked about last 

year was closing the so-called London loophole, to stop traders from 

routing transactions through offshore markets to get around limits 

on speculation. I worked with Senator Dorgan and a lot of others 

on this speculation issue. Do you think that would be helpful? 

Mr. GENSLER. Senator, I do. I congratulate your efforts on that. 

I think that the CFTC has done some things administratively, but 

I think it would be very helpful, working with Congress, if confirmed, to actually have that in statute. And it is really—the core 

principle I would have is that markets are so interlinked around 

the globe that if it affects American consumers, that we should 

make sure, even though we might have reciprocal arrangements 

with other regulators around the globe, that fraud and manipulation, that position limits and reporting have some consistent regime. And so I would look forward to working together on that and 

26 

I do believe it is important to have these position limits apply to 

various trading platforms around the globe. 

Senator KLOBUCHAR. You know, credit default swaps have been 

blamed for helping to accelerate the over-leveraging on Wall Street. 

Do you share this view and do you think that something should be 

done about this? 

Mr. GENSLER. Senator, I believe a great deal needs to be done 

with regard to the over-the-counter derivatives marketplace, not 

just credit default swaps but, as the Chairman and I were discussing as you came in, to bring the whole over-the-counter derivatives marketplace into a regulatory regime with centralized clearing and exchanges. 

Senator KLOBUCHAR. Right. 

Mr. GENSLER. But beyond that, I do think credit default swaps 

raise an additional set of unique challenges. In AIG, we saw a book 

of business that wasn’t even regulated. The transactions weren’t 

and the financial institution wasn’t. I am recommending that those 

should be regulated, and the credit default swaps’ unique properties, because often they are very much like a corporate bond and 

it is a corporate bond with a lot of leverage in it. And I believe that 

regulators need there to work together to find the appropriate controls in addition to clearing and exchanges. I think there is appropriate further regulation in that market that is needed. 

Senator KLOBUCHAR. Good. One last question, following up with 

the last questions that the Chairman was asking with the custom 

issue. Last September, the CFTC issued a report on the over-thecounter markets and it contained some recommendations, and one 

important recommendation was to create enforceable position limits by developing limited risk management exemptions for swap 

dealers and requiring dealers to, first of all, report to the CFTC 

about large customer positions, and second, certify that none of the 

non-commercial customers exceeded specific position limits in related exchange trading contracts. 

Do you support this action? Do you think that this is a recommendation, and should that rulemaking activity continue? 

Mr. GENSLER. Senator, I do, but even further, as I understand 

it, and again, I look forward to learning more about this, if confirmed, but these various position limits that are at the heart of 

the framework to comply with the mission of this agency have 

some exemption that have been issued going back nearly 20 years. 

Many of them were issued by staff, ‘‘no action’’ letters. I believe 

that every one of those exemptions needs to be reviewed. As Chairman, I would be looking forward to working with my fellow Commissioners, Mike Dunn and Bart Chilton, Jill Sommers, Walt 

Lukken, and really take a look at all of these. 

And second, also look at the process of issuing ‘‘no action’’ letters 

themselves. Some should stay at staff level. But others really are 

consequential and that is why you have Senate-confirmed people in 

the jobs to look at these things. 

Senator KLOBUCHAR. OK. Thank you very much. I appreciate it. 

Mr. GENSLER. Thank you, Senator. 

Chairman HARKIN. Thank you, Senator Klobuchar. 

Senator Chambliss. 

27 

Senator CHAMBLISS. Thank you. If I could go back to the Chairman’s chart there for a minute, Mr. Gensler, and I want to see if 

I can ask this question the right way. I don’t want to take your language and interpret it in some way other than exactly what you 

meant. But when you talk about the spikes in the market and you 

talk about speculators causing that huge spike, is it not a fair 

statement to say that speculators who sought to manipulate the 

market are the ones that may have influenced that spike versus 

speculators per se causing that spike? 

Mr. GENSLER. I think that what I believe is that there are many 

contributing factors, that we have had in our economy and around 

the globe many imbalances, low savings rates here, very high savings rates, nearly 40 percent saving rate in China. There are great 

global imbalances that have been flooding into markets. 

Within those global imbalances, I believe that commodities started to be viewed as an asset class for investment. And so one of the 

contributing factors—there were other contributing factors, too, but 

one of the contributive factors, I think, is as investors started to 

look at commodities as an asset class, and unfortunately, over the 

globe, risk was underappreciated, terribly underappreciated, and 

when I say that, I mean it was underpriced. 

There were too many investors, and, yes, speculators who 

thought it was more likely that something would go up than down, 

that the demand factors from China and India or the low refining 

capacity would keep pushing these prices up. And that collective 

misjudgment of market participants is what I think you see there, 

but not necessarily—I don’t have the facts or figures to say that it 

was manipulation, sir. 

Senator CHAMBLISS. You made a statement which I think is correct and which I have argued with my colleagues who would like 

to see all speculators eliminated. Are you going to have a market 

that functions properly without speculators? 

Mr. GENSLER. Senator, again, I think at the heart of the futures 

market since the first contracts, I believe, were put in place in the 

1870’s is that for a hedger to have somebody on the other side who 

is willing to bear that risk, we call the person on the other side a 

speculator. We need—the markets need that so that the commercial interests, the farmer, the rancher, the grain merchant, has 

somebody on the other side to bear that risk. 

Senator CHAMBLISS. And you have been on both sides of this. 

You have been on the investment side as well as on the regulatory 

side. You have got extensive experience on both sides. If an investor in the market, somebody who trades in the market regularly, 

is overregulated, including adding position limits, and they have 

the availability of going offshore, what is that person as an investor 

who feels like he is overregulated going to do with respect to the 

American market that CFTC regulates versus trading offshore? 

Mr. GENSLER. Senator, I believe these markets are completely 

interlinked at this stage. So I think that it is critical that the U.S. 

regulators work with our global counterparties in Europe and in 

Asia to assure ourselves that there is consistent regulation. And 

where we are unable to get that consistent regulation, to work still 

to protect the American public the best we can as to the transactions with the American public, or where there is American prodVerDate Nov 24 2008 00:48 Mar 02, 2010 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\DOCS\54564.TXT SAG2 PsN: SAG2
28 

uct, a product like West Texas intermediate, or products that are 

right here. 

But I agree with you, sir, that paramount is working with the 

global regulators. I believe that we can find that consensus. But if 

confirmed, I know there will be challenges to hopefully make sure 

it is around the globe. 

Senator CHAMBLISS. Well, if you are an investor, whether you sit 

in Washington or New York or Atlanta, and you want to buy a contract of a product that is sold internationally or on a market that 

is regulated by CFTC and you have got the choice of where to go 

to buy that, as an investor, are you going to look for a market that 

gives you the greatest amount of flexibility and therefore the greatest opportunity and a safe way to ensure a profit, or are you going 

to go to a market that just overregulates you to death? 

Mr. GENSLER. Senator, I think that investors in these markets 

are so interlinked that they will find a fungible place to go, and 

that is why, if confirmed, my commitment to you is to, first, to 

raise with you and the rest of the administration what rules I 

think will best protect the American public, but then second to 

work feverishly with international regulators to try to see if they 

agree, and where we agree, hopefully adopt a consistent regime. 

Where there are disagreements, at least come back to this Congress and the administration, because those differences will possibly be important. Hopefully, those differences won’t be, but they 

may be really important to the American public. 

Senator CHAMBLISS. Well, I think all of us want to make sure 

that the American public is totally protected and make sure that 

anybody who invests in the market is going to have the assurance 

that somebody is looking over their shoulder. But the fact is that 

these markets are traded on by individuals who are extremely sophisticated, and as you said, things have changed so much over the 

last 9 years. Gosh, we didn’t have electronic trading back then, and 

now, very few trades probably are not in some way not connected 

to the electronic side of it. 

And I know from talking to traders who have told me, look, you 

start putting position limits on me, pure and simple, hey, I can 

trade on the London Exchange from Atlanta just like I can trade 

on ICE or CME or New York Exchange, and that is what we will 

do. I just want to make sure that there is a clear understanding 

that we can go too far and we have got to be careful about that. 

Mr. GENSLER. And I think that, Senator, you and this committee 

and the rest of this Congress worked last year, as I understand, in 

the farm bill to say contracts that look like the contracts here— 

they are called look-alike contracts—that had a particular relevance to these markets here, those were the ones that position 

limits. 

There may be other contracts overseas that really are on other 

markets involving other products. But where it really was sort of 

almost like twins, those look-alike contracts, it was appropriate to 

have consistent regulation. But I certainly, if confirmed, understand it, as you say. I think that my experience both on Wall Street 

and in government provides a certain background to understand, 

exactly as you said, that we have to get this right. 

29 

Senator CHAMBLISS. With respect to the standardization of products versus the customized products out there, I think if I heard 

you correct, you say that there ought to be a clearinghouse for the 

standardized products. But you and I, I think, agree that we have 

got to be very careful with the customized products because I am 

not sure how you do that, how you are going to have a clearinghouse for all customized products. 

I know one thing that has concerned some of my colleagues is 

that the way we all know these markets work are that a customized product may change hands two or three, four, five, ten 

times in one single day, and how in the world we are going to clear 

all of those in a manner that has a regulator looking over their 

shoulder, I don’t know. I am concerned about those types of contracts certainly going overseas. 

But am I wrong in my thinking somehow? Is there some way 

that you think that we can come up with a regulatory process that 

not only is a clearinghouse for the standardized product, but the 

customized product, also? 

Mr. GENSLER. I do, Senator. I know these are very complex markets and these are challenges, but I do, and I think that there can 

be a product that changes hands multiple times a day is probably, 

with all respect, more standardized than customized. There has 

been a number of approaches, I know both here in the Senate and 

the House and some draft bills on how to define what might be customized. 

But centralized clearing adds a great benefit because it means 

that these individual financial institutions, these 15 or 20 large financial institutions, are no longer exposed to each other. And one 

of the great calamities of this past crisis is that one financial institution couldn’t fail because if it failed, it was like interconnected, 

so interwoven that it was going to bring down the whole system. 

One of the big benefits of centralized clearing is that all of these 

trades, rather than with each other, is with a central mechanism, 

and there would be a posting, like on the futures exchanges, a posting of collateral on a regular basis. AIG, when it got the call, had 

to post $40 billion of collateral. Well, we know what happened 

then. The U.S. taxpayers stepped in and loaned the money to AIG. 

I believe we really have to work feverishly and urgently to try 

to make sure that doesn’t happen again. I think that centralized 

clearing, I think the bias that I am suggesting is toward getting 

those contracts in, and if a clearing mechanism, and there are a 

number of competing clearing mechanisms, but if a clearing mechanism would accept a contract, that is certainly one test it should 

be there, and then Congress can also dictate certain rules. I mean, 

there is a lot that we would need to work together, if confirmed, 

on how to structure this. But I do think it does help lower the risk 

tremendously. 

Senator CHAMBLISS. The ‘‘no action’’ letter, would you support 

elimination of ‘‘no action’’ letters, or do you support still utilizing 

the ‘‘no action’’ letter process in appropriate situations? 

Mr. GENSLER. As I have come to understand it, all of the major 

regulatory agencies, whether it is the FTC or the SEC, CFTC, has 

a form of ‘‘no action’’ letters. There are some things that are truly 

30 

administrative and staff writes a letter and says they are not taking an action. 

What I believe we need to do at the CFTC, working with the 

other Commissioners, is really look at that process and see how is 

that done and which ones are consequential and which should come 

up to the full Commission, a five-member Senate-confirmed Commission. So I believe at the end, there would still be some that are 

really truly either administrative or ministerial or consistent with 

role, but there are consequential ones, I believe looking now in 

hindsight, and hindsight is—I know we are foresight here, but I believe that we need probably to really look at which ones come up 

to the full Commission for their consideration. 

Senator CHAMBLISS. Last, let me just say, I think Senator Lugar 

had a really good point. Even in Math 101 at the University of 

Georgia, they taught me that if you can buy something for $1.96 

in the United States and take it to Europe and sell it for $20, that 

is a pretty good deal. 

I can envision 10 years down the road, if we have a true cap on 

trade system, we are going to see these things traded on a global 

market. So I just say that is something that has got to be in your 

line of thinking here as we go through the next 12 months, 24 

months, whatever it may be, if something does come out of Congress in that respect, because, gee whiz, you talk about electronic 

trading being a milestone. This is going to overwhelm us, it would 

look like to me, with this international cap in trade system that we 

potentially have out there. 

Thank you, Mr. Chairman. 

Chairman HARKIN. Thank you very much, Senator Chambliss. 

We have been joined by our distinguished colleague from North 

Dakota, Senator Conrad. 

Senator CONRAD. Thank you so much, Mr. Chairman and Ranking Member Chambliss. Thank you, Mr. Gensler, for being here. 

I was here earlier and had to go to—you know how this place 

is—other obligations. I very much apologize for not being here for 

the rest of the hearing. I was so struck by having Senator Mikulski, Senator Cardin, and one of my all time favorites, Senator Sarbanes, here, and it reminded me of my favorite story about Senator 

Sarbanes, who was a great baseball player in his youth. 

Mr. GENSLER. He was. He was. Not a lot of people know that, 

but it is true. 

Senator CONRAD. Yes, he was a terrific athlete. He was selected 

for the Maryland All-Star Team as a shortstop, and he went to the 

practices and it came time for the game and he was listed as starting at second base. And he went to the coach and he said, ‘‘Why 

is it that I am at second base? I was chosen as the shortstop.’’ And 

the coach said, ‘‘Kaline will be playing shortstop.’’ 

[Laughter.] 

Senator CONRAD. That was Al Kaline. And I thought, that is a 

great story, isn’t it? 

Mr. GENSLER. It is terrific. 

Senator CONRAD. Sarbanes had to stand aside for Al Kaline. 

Well, you, in essence, are coming into the big leagues, too, and 

this is a different kind of big leagues. Our country and our world 

are in very serious shape. I just spoke to a group from back home 

31 

talking about how we got in the situation we are in, and I believe 

it is a combination of a very loose monetary policy, a very loose fiscal policy, a very loose trade policy, all coupled with deregulation, 

that created the seed bed for bubbles to form. And we didn’t get 

just a housing bubble. We got an energy bubble. We got a commodity bubble. And when those bubbles burst, it did enormous 

damage. There is a lot of wreckage here. And all of us have responsibilities. 

While I fought against what I thought was a very dangerous fiscal policy and a dangerous trade policy, I, along with others of my 

colleagues, voted for the Modernization Act, which you supported, 

and I look back, while there were many good things in the Modernization Act, I think there was one part of it that was very, very 

wrong, and I regret deeply my own going along with it, although 

I had grave reservations about it, and that is the question of credit 

default swaps and derivatives and whether or not they are regulated. You and others told us, don’t worry, these are very sophisticated players and there will be a self-regulation because they are 

better able to monitor those markets than we are. 

Well, the more I have looked into it, the more convinced I have 

become that this is one of the great Ponzi schemes of all time. We 

think about Madoff’s Ponzi scheme. That is a $50 billion Ponzi 

scheme. I think derivatives, while probably the vast majority of it 

is completely legitimate, the part that was not was the assessment 

of risk, the assessment of risk. 

Last year, I was with a man who was head of all derivatives 

trading for one of the major global financial firms and I said to 

him, have you ever looked at the formulas these PhDs in math 

have come up with to determine risk in these contracts? He said, 

‘‘Yes.’’ I said, could you understand it? He said, ‘‘No.’’ I said, I will 

tell you—and this is the guy who was in charge of all derivatives 

trading. I said, I have got a master’s in business. I asked my staff 

to bring me one of these formulas. I couldn’t make head nor tails 

out of it. And it turns out they didn’t have in these risk formulas 

any assessment of housing prices going down. 

Well, to make a long story short, all of us who participated in 

supporting that bear responsibility. There are many other elements, the fiscal policy, monetary policy, other deregulation that 

was done. But you, too, have responsibility, because, you know, at 

least for some small part of that, you gave us bum advice. 

What can you say that would make us comfortable, if we have 

that view, and maybe you have got a different view and I certainly 

respect that, especially in the presence of your daughters, who are 

very patient—what would you say to us who are now deeply concerned about the mistakes that were made? What would you say 

to assure us that you would be part of the solution? 

Mr. GENSLER. Senator Conrad, I appreciate the question. Looking back now, it is clear to me that those of us involved at the time 

should have done more to protect the American public through 

strong, comprehensive, and aggressive regulation. There are some 

things that we raised and looking back now should have fought 

harder for, to regulate the actual institutions, the derivative dealers, to keep oil and metals consistently regulated with wheat and 

corn and other products. We should have fought—we did recVerDate Nov 24 2008 00:48 Mar 02, 2010 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\54564.TXT SAG2 PsN: SAG2
32 

ommend that, but in the final bill were unable to achieve either of 

those. We should have fought harder. 

I think there were also things that were but dots on the landscape. You raised credit default swaps at the time of that legislation. Approximately 97 percent of the market were interest rate derivatives and currency derivatives, and the bulk of the remaining 

3 percent was actually equity derivatives and commodity derivatives, as small as they were back then. And that market has burgeoned since then. 

Senator CONRAD. Exploded. 

Mr. GENSLER. And in very consequential ways, where an AIG 

had a book of business so significant, and I believe that those credit 

default swaps at AIG were often being misused, and sometimes by 

regulated institutions, banks in Europe that were getting protection and lowering their capital charges with regard to that. 

I think also, Senator, and you raised this in your question, I 

think there was an assumption at the time about whether the regulation of institutions, these large financial institutions, would be 

enough. And I do think in retrospect that assumption was thoroughly tested for a couple of reasons. 

One, even where there was broad regulation, at the holding company and of everything, there was no specific regulation of the derivatives affiliate. I believe that even now, where the Federal Reserve might have broad holding company regulation, that if confirmed, I would look forward to working with Congress and the 

other regulators to make sure that the dealers themselves have to 

have capital, business conduct, and reporting requirements. But 

capital is the shock absorber, so to speak, to guard against excess 

leverage. I have come firmly to believe that. 

At the same time, I believe that we need to have a full regulatory 

regime for the market so that the centralized clearing, and we 

could get the benefits of centralized clearing as we have in the futures market, and those benefits might sound like back-office 

plumbing, but they are very real because just as in the futures 

markets, you have to post margin on a regular basis and have a 

sort of a daily reckoning of these contracts and at the same time 

have to send in the information and have all the positions and the 

recordkeeping and reporting. 

Exchanges bring transparency to transactions. Where small businesses, small commercial interests right now, I believe, actually 

pay more for even the standardized products, more because they 

don’t have that transparency. Now, just one basis point might be 

a little bit, but transparency to an overall market, I think, brings 

further economic prosperity, as well. 

So I do think, looking back now, it is clear to me we should have 

done more. But over time, I believe that some of these weaknesses 

have been sorely tested. The regulatory and financial system completely failed the American public in this regard. And I look forward, if confirmed, working with you, as I did with Senator Sarbanes, to try to sort of sort through some of that complexity, the 

dust that might be kicked up by opponents, and they will be very 

strong and loud opponents, some of them raising legitimate concerns, but trying to find how we can best protect the American pubVerDate Nov 24 2008 00:48 Mar 02, 2010 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 C:\DOCS\54564.TXT SAG2 PsN: SAG2
33 

lic and bring a regulatory regime to a field that hasn’t had one to 

this date. 

Senator CONRAD. Well, I appreciate that answer. You know, I 

look back. I have been trying to write an analysis of what has happened here, a broader look at all the factors that contributed, and 

I do very much believe that it is a very unusual combination of a 

loose monetary policy, after 9/11 we had very low interest rates for 

a very extended period of time, a very loose fiscal policy with massive Federal deficits. 

At the time when the economy was strong, we still had a very 

loose fiscal policy, very unusual to have loose monetary policy and 

loose fiscal policy simultaneously, coupled with very loose trade policy with record trade deficits. And then the deregulation that occurred and, you know, I will stand up and I will be held accountable. I made a mistake. 

I mean, I will assert there were many good things in that Financial Modernization Act, but I believe there was an Achilles heel 

that some of us were worried about at the time but we thought the 

good things would overcome that weakness. Well, we were wrong 

and we were wrong big time and all of us need to ’fess up about 

mistakes that have been made here. We have got to try to get this 

back on track. 

I thank the Chairman for your patience. 

Mr. GENSLER. Senator, I thank you for that. I agree with your 

assessment, if I could, Mr. Chairman, that there was a great many 

things that were imbalances, and you named those, but also the 

regulation, that if confirmed, I would look forward to working with 

you and this Congress that we really do bring a full regulatory regime not only to the institutions, which I think we need to do, but 

also, as the Chairman has laid out in his bill, with the goal to bring 

it to the markets, as well. 

Senator CONRAD. Thank you, Mr. Gensler. Thank you for your 

very honest answers. 

Mr. GENSLER. Thank you. 

Chairman HARKIN. Thank you, Senator Conrad. 

Well, Mr. Gensler, this has been a great hearing. I think we have 

gotten great responses and an open and frank discussion. I don’t 

mean to belabor it any longer, although in listening to just the last 

two questioners here, Senator Chambliss and Senator Conrad, I 

was just jotting down here CMS, CVOs, CMOs, CMBSs that is 

commercial mortgage-backed securities—CDSs. Now we have gotten into things like CDO-squared, CDO-cubed, and you just keep 

slicing these tranches of derivatives out there all the time. 

The financial sector has come up with all of these exotic products. No one really understands them except maybe a few people 

on Wall Street, and they may not fully. But credit default swaps 

didn’t exist before about 1998, not really. 

Mr. GENSLER. That is right, sir. 

Chairman HARKIN. And the world seemed to operate just fine 

without them. The same with collateralized debt obligations or 

collateralized mortgage obligations. All this creativity in new contracts happened in the early 1980’s, through the late 1980’s, and 

then they really boomed in the 1990’s, all these different derivative 

contracts and financial products. 

34 

I asked the question in our October hearing, I said, what market 

forces out there demanded these products? Who was demanding 

this? The answer came, no one. It is just that a few of the financial 

institutions had some of these whiz kids and mathematical 

geniuses. Now they have big computers that could slice and dice 

these obligations into all these little tranches, securitize them as 

bonds, and then sell tranches, a highly leveraged tranche, or one 

that is not so highly leveraged, and on and on until finally you get 

this morass out there of instruments that no one really understands. 

I asked Secretary Paulson one time when we had one of our 

meetings last fall, before the TARP. I said, why don’t we insist, if 

we are going to put this money out, we insist that each one of those 

entities receiving this federal money give us a valuation of each 

one of those instruments that they have and insist on what is the 

value. His response, and we were all in that room together, his response was, ‘‘Well, they don’t even know what the value is.’’ Billions of dollars, and they have no idea what the value is. 

Well, I don’t know. I just think we have to—and this is not really 

in your bailiwick, but I just think we in the Congress have to really 

think about whether or not all these financial products and instruments are worthy of legitimacy. And they are all off exchanges. 

These aren’t on exchanges. We have no idea what is going on out 

there. So I don’t know if they are legitimate or not. I tend to think 

in some of these cases they are probably not, especially when you 

get into synthetic derivatives or you get into the naked credit default swaps. It boggles the mind about what people are doing with 

these instruments. 

Now, it would be all right if these investment bankers were 

using their own money to do that. I could care less. But they are 

using my money, your money, my constituents’ money that is in 

401(k)s, pension plans, all other kinds of devices where they have 

taken money now and are investing it in these and so they are 

playing with our money. 

So I just raise the question, I guess, on markets. We all believe 

in the market, but as you pointed out, I think for a market to really function, you have to have three things. Correct me if I am 

wrong. You have an MBA; I don’t. 

[Laughter.] 

Mr. GENSLER. But an MBA, sir, doesn’t mean—with all respect, 

it doesn’t mean that you have—— 

Chairman HARKIN. I am just kidding you. My daughter has one. 

I keep asking her this. But it seems for a market to function, you 

have to have many buyers, many sellers, and transparency. If you 

mess up one of those, you don’t really have a market. You may call 

it a market. Many buyers, many sellers, transparency. Once you 

have few buyers, many sellers, or you have buyers and sellers and 

you don’t have transparency, you don’t have a market. 

And so when we talk about markets, we have to keep in mind 

just what we are talking about. What kind of markets do we want? 

Very few real markets exist any longer out there. 

Mr. GENSLER. Mr. Chairman, I would—I know that you mean 

this, but I would add something else to what is a component of 

markets. We need regulation. We need regulated markets and so 

35 

that is what I am here to say, and if confirmed, I would look forward to working with you. Senator Conrad had asked me about 

what I had done in the past, and, I mean, I even wrote a book 

called The Great Mutual Fund Trap, and it wasn’t by mistake that 

on the cover of the book it has that old three monte game. I mean, 

I just brought it here just because I remember it. But there is a 

reason that the book has that here. 

Chairman HARKIN. I have got to read that. 

Mr. GENSLER. Well, we will give it—it is all right if you don’t 

read it. I am just saying there is a reason that is there. 

Chairman HARKIN. But what I say about sellers, buyers, and 

transparency, that is what is called the, quote, ‘‘unfettered free 

market.’’ Now, you are right. Do we want an unfettered free market? Do we want the free flow of capital? I hear that all the time. 

I read that we want the free flow of capital. Well, an economist 

who was at our hearing in October said, I am not certain we want 

the free flow of capital. We want the efficient flow of capital. 

And he used an analogy which struck home with me. He said, 

well, it is like traffic. If you want the free flow of traffic, get rid 

of all your stop signs. Get rid of the stoplights. Get rid of the speed 

limit signs. Get rid of all the warning signs. You will have the free 

flow of traffic, but you will have a lot of wrecks. What you want 

is the efficient flow of traffic. 

The same is true in financial markets. You want the efficient 

flow. Therefore, you need the stop signs and the caution signs and 

the regulations so that capital is efficient, not just free. 

So anyway, I just wanted to make that point, to say that I think 

we really have to take a look at whether all of these types of instruments are really necessary and legitimate. If they are, they 

ought to be regulated. That is all I am saying. 

Now, this does get into your bailiwick. Every single one of those 

instruments, I submit, is a future. Every single one of them is some 

derivative and it is based on something happening or not happening in the future and therefore would come under the purview 

of the CFTC. I don’t know if you have any comment about that, but 

if we are going to continue these kinds of contracts, should they not 

be regulated? 

Mr. GENSLER. Sir, I believe that we do need regulation and many 

of the list, and it was a bit of an alphabet soup for the public, but 

many of them are actually currently even regulated around what 

is called asset securitizations, not by the CFTC, but by the SEC as 

securities. Collateralized debt obligation is actually an asset security. 

And I believe that part of regulatory reform, as the President has 

called for and Congress and the President are going to work closely 

together, and if confirmed, I am eager to lend a hand there, is that 

I believe that we really have to look at all asset securitizations, 

whether they are called collateralized debt obligations, assetbacked securities, commercial mortgage-backed securities that you 

mentioned, or even asset-backed securities, uncollateralized debt 

obligations, which because there are two sets of letters there, somebody caused that squared term you called it. That whole world of 

asset securitization needs to be looked at. 

36 

At the same time, the American public, though, needs the benefit 

of capital to start moving again, to purchase their automobile, to 

have the student loans, to get their credit cards rolled over, and to 

get their mortgages, and a lot of that is done in this securitization 

market, particularly as banks have so constrained their market. 

So we need the rules, just like you said on the road. We need 

that flow of capital to the American homeowner to get the student 

loan, to get the car loan, to get their mortgage. But at the same 

time, I believe, and if confirmed, I look forward to working with 

you on the additional regulations that are needed even in the world 

of asset securitizations that come under another regulator than the 

CFTC. 

Chairman HARKIN. We need to discuss this further because I had 

a student loan, and I bought a car with a loan long before any of 

these derivatives ever existed. So what was wrong? I don’t know 

if these derivatives are necessary for people to get car loans or student loans or mortgages or anything else. 

Mr. GENSLER. It worked well in America and it worked well for 

you. As many things were just dots on the landscape eight or 9 

years ago, this market, too, has taken off, and so I believe it is time 

to work together as regulators and with Congress to see what additional rules are necessary there. Again, somewhat out of the jurisdiction of the CFTC. 

Chairman HARKIN. That is true, and some of what I described is 

not part of the CFTC’s jurisdiction. 

Senator CHAMBLISS. Mr. Chairman? 

Chairman HARKIN. Yes? 

Senator CHAMBLISS. One reason that I was kind of pursuing a 

line of questioning relative to what may happen with respect to offshore trading is I think Mr. Gensler is exactly right, that we didn’t 

envision 10 years ago what was going to happen in the marketplace. You talk about eliminating products. Shoot, there are some 

smart guys out there right now that are thinking about additional 

products. 

Chairman HARKIN. That is true. 

Senator CHAMBLISS. We can’t even conceive what they are. 

Chairman HARKIN. That is true. 

Senator CHAMBLISS. But the one thing I am impressed with is 

that when you say that we need to think this through and we need 

to make sure that we regulate these in the right way, we have got 

to look ahead to what type of products there may be out there that 

get us into this same mess again 10 years, 20 years from now if 

we aren’t careful. We are never going to be able to anticipate exactly what those products are and nobody ever thought about packing mortgages and selling them five or six times a day. 

If you talk about eliminating, I think you really cause problems. 

But if you are talking about making sure that you regulate in the 

right way and you give these guys the tools and the resources, primarily, which they don’t have now, then I think we will do a better 

service to the consumer out there. 

Chairman HARKIN. Well, Mr. Gensler, thank you very much. I 

thought this was a very enlightening session. I appreciate your 

forthrightness. 

37 

We have several letters of support, and, I might add, one letter 

in opposition to Mr. Gensler’s nomination. I ask unanimous consent 

that these letters be made a part of the record. 

[The following information can be found on page 70 in the appendix.] 

Chairman HARKIN. I ask unanimous consent that if there are 

materials that other Senators wish to submit for the record, that 

those also be included. 

I will leave the record open until noon tomorrow for any additional written questions that any Senators want to submit to Mr. 

Gensler, and then the record will be closed at noon tomorrow. 

Mr. GENSLER. Mr. Chairman, Ranking Member Chambliss, if I 

can thank you both for your hearing and the inquiry. I also want 

to thank Senator Mikulski, Senator Cardin, and Senator Sarbanes 

on the record for their support. If confirmed, I look forward to 

working with you and your staffs on this very significant agenda 

we have forward. 

Chairman HARKIN. Mr. Gensler, may I say that it is great you 

have had two of your daughters here. They probably think it is 

probably the most boring thing that has happened to them in a 

long time and they deserve to have a nice dinner out tonight. 

[Laughter.] 

Mr. GENSLER. I thank you. I think you are right about that. 

Chairman HARKIN. Thank you very much. The committee will 

stand adjourned. 

[Whereupon, at 4:56 p.m., the committee was adjourned.] 

(39) 

A P P E N D I X 

FEBRUARY 25, 2009 

40 


54564.001
41 


54564.002
42 


54564.003
43 


54564.004
44 


54564.005
(45) 

DOCUMENTS SUBMITTED FOR THE RECORD 

FEBRUARY 25, 2009 

46 


54564.006
47 


54564.007
48 


54564.008
49 


54564.009
50 


54564.010
51 


54564.011
52 


54564.012
53 


54564.013
54 


54564.014
55 


54564.015
56 


54564.016
57 


54564.017
58 


54564.018
59 


54564.019
60 


54564.020
61 


54564.021
62 


54564.022
63 


54564.023
64 


54564.024
65 


54564.025
66 


54564.026
67 


54564.027
68 


54564.028
69 


54564.029
70 


54564.030
71 


54564.031
(73) 

QUESTIONS AND ANSWERS 

FEBRUARY 25, 2009 

74 


54564.032
75 


54564.033
76 


54564.034
77 


54564.035
78 


54564.036
79 


54564.037
80 


54564.038
81 


54564.039
82 


54564.040
83 


54564.041
84 


54564.042
85 


54564.043
86 


54564.044
87 


54564.045
88 


54564.046
89 


54564.047
90 


54564.048
91 


54564.049
92 


54564.050
93 


54564.051
94 


54564.052
95 


54564.053
96 


54564.054
97 


54564.055
98 


54564.056
99 


54564.057
100 


54564.058
101 


54564.059
102 


54564.060
103 


54564.061
104 


54564.062
105 


54564.063
106 


54564.064
107 


54564.065
108 


54564.066
109 


54564.067
110 


54564.068
111 


54564.069
112 


54564.070
113 


54564.071
114 


54564.072
115 


54564.073
116 


54564.074
117 


54564.075
118 


54564.076