. professional speculators were easy to blame for fluctuations in market prices that actually reflected fundamental shifts in supply or demand, as they are today. the market clearing process is a very abstract concept. it is sometimes far easier to envisage price changes as the consequence of individual manipulators. indeed, for a lot of nineteenth - century ring traders, it was some measure of manhood ( women were few ) that they could squeeze or corner a market. the evidence suggests that this was largely walter middy - type fantasy. in any event, the grain futures act of 1922 established many of the key elements of our current regulatory framework for derivatives. in general, the act was designed to confine futures trading to regulated futures exchanges. the act made it unlawful to trade futures on exchanges other than those designated as contract markets by the secretary of agriculture. the secretary was permitted to so designate an exchange only if certain conditions were met. these included the establishment of procedures for recordkeeping and reporting of futures transactions, for prevention of dissemination of false or misleading crop or market information, and for prevention of price manipulation or cornering of markets. finally, the act recognized the need to permit bona fide derivatives transactions to be executed off of the regulated exchanges ; it explicitly excluded forward contracts for the delivery of grain from the exchange - trading requirement. forward contracts were essentially defined as contracts for future delivery to which farmers or farm interests were counterparties or in which the seller, if not a farmer, owned the grain at the time of making the contract. the next major piece of federal legislation affecting futures regulation was the commodity exchange act ( cea ) of 1936. as in the case of the grain futures act, an important objective of the cea was to discourage forms of speculation that were seen as exacerbating price volatility. in addition, the cea introduced provisions designed primarily to protect small investors in commodity futures, whose participation had been increasing and was viewed as beneficial. these provisions included requirements for the registration of futures commission merchants ( fcms ), that is, futures brokers, and for the segregation of customer funds from fcm funds. the cea also expanded the coverage of futures regulation to cover contracts for cotton, rice, and certain other specifically enumerated commodities traded on futures exchanges, and prohibited the trading of options on commodities traded on futures exchanges. the federal regulatory framework for derivatives market regulation then remained substantially unchanged until 1974, when congress enacted the commodity futures trading commission act. the

janet l yellen : welcoming remarks speech by ms janet l yellen, chair of the board of governors of the federal reserve system, at the fifth annual community banking research and policy conference " community banking in the 21st century ", cosponsored by the federal reserve system and conference of state bank supervisors, federal reserve bank of st. louis, st. louis, missouri, 4 october 2017. * * * i am very glad to welcome everyone here to this conference sponsored by the federal reserve system and the conference of state bank supervisors. since the first of these gatherings five years ago, this research and policy conference has established itself as an important event where industry leaders, academics, and supervisors discuss the latest research and exchange ideas about promoting a healthy and growing community banking industry. all of us share an interest in seeing that community banks continue their vital role in their customers ’ lives and in a strong and stable u. s. financial system. the fed has been working hard to ensure that its regulation and supervision of banks are tailored appropriately to the size, complexity, and role different institutions play in the financial system. for community banks, which by and large avoided the risky business practices that contributed to the financial crisis, we have been focused on making sure that much - needed improvements to regulation and supervision since the crisis are appropriate and not unduly burdensome. one way we are doing this is through the regulatory review required by the economic growth and regulatory paperwork reduction act, known as egrpra. the first step we took, pursuant to egrpra, was to listen to industry and others with a stake in how community banks are supervised, which was accomplished through soliciting written comments and by holding six outreach meetings in 2014 and 2015. our egrpra report, issued in march, was focused on community banks, and it noted steps that had already taken place, for example, to simplify call report requirements and expand the number of firms eligible for less frequent examinations. since that report, the board of governors, along with the federal deposit insurance corporation and the office of the comptroller of the currency, has proposed a rule expanding the number of commercial real estate transactions that will no longer require an appraisal, allowing for a less detailed evaluation. and just last week, the fed, along with other regulators, took a significant step to reduce the regulatory burden on community banks and other smaller and less complex institutions by proposing to simplify several requirements in the regulatory capital rule.