The Senate Appropriations Committee approved a much-needed boost to the Commodities Future Trading Commission’s (CFTC) budget yesterday. The CFTC is responsible for implementing and enforcing rules to ensure that speculative trading in the oil futures market is tightly monitored.
Most airlines utilize hedging strategies to protect themselves from wild spikes and drops in the price of oil. They are legitimate end users of the product, and the CFTC permits the airline industry to continue such legitimate hedging practices. However, many large investors use the derivatives markets to speculate on oil prices resulting in unsustainable increases in fuel costs. Such speculation negatively impacts our jobs and our industry, which is why ALPA has been strongly advocating for tougher rules and oversight to reduce excessive speculation.
The responsibilities of the CFTC increased dramatically with the enactment of the Wall Street Accountability and Consumer Protection Act. This investment in the CFTC is critical in protecting ALPA pilots and aviation workers from highly speculative bets and market manipulation strategies employed by big players on Wall Street.
U.S. Senate panel OKs budget boosts for SEC, CFTC
(Reuters) – U.S. Senate appropriators approved major funding boosts for the country’s financial market regulators on Thursday, setting up a likely battle with Republicans who want to use the power of the purse to slow down the 2010 Dodd-Frank Wall Street reforms.