Timothy Massad, the Treasury Department official responsible for overseeing the U.S. rescue of banks and automakers after the credit crisis, will be nominated to head the country's top derivatives regulator.
Massad will be nominated by President Barack Obama today to succeed Gary Gensler as chairman of the Commodity Futures Trading Commission, an agency with expansive new authority under the 2010 Dodd-Frank Act to regulate trading by banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to a White House statement. His nomination requires Senate confirmation.
Bloomberg chief Washington correspondent Peter Cook and Bloomberg View columnist Matthew C. Klein examine the resume of Tim Massad, President Barack Obama's nominee to lead the CFTC, the abilities of the agency in its current form and offer a preview of Janet Yellen's confirmation hearings to the Federal Reserve. They speak on Bloomberg Television's "Bloomberg Surveillance."
A former partner at Cravath, Swaine & Moore LLP in New York, Massad was a legal adviser to a congressional panel that oversaw the Troubled Asset Relief Program, which loaned billions of dollars in banks and auto companies to help stabilize the economy during the 2008 crisis. The program, which he then was confirmed to manage at Treasury, spurred a political backlash that drove congressional supporters from office in the 2010 election and fed criticism of Wall Street.
"Nobody ever wants to see TARP repeated. But the fact is, TARP is a program that did its job," Massad said Sept. 30 at the Brookings Institution. "It has worked faster, better, and cheaper than most people ever thought possible."
As of Nov. 8, $421.54 billion had been disbursed under the TARP program, while $406.48 billion had been repaid, according to the latest numbers from the Treasury Department.
Massad would take over an agency that has put into place more than 60 rules mandated by Dodd-Frank to help reduce risk and increase transparency in the swaps market after largely unregulated trades helped fuel the crisis. The rules have yet to all take effect as the agency battles budget challenges as a result of failed efforts to increase funding from Congress.
The commission, which is designed to have five members, may instead have only one Democrat and one Republican early next year if Obama and the Senate cannot overcome political hurdles to confirm new commissioners.
Bart Chilton, a Democratic commissioner, said he will step down before next year, and the administration has yet to nominate his replacement. Jill E. Sommers, a Republican, stepped down from the CFTC in July and the Senate has failed to act on the nomination of J. Christopher Giancarlo as her successor.
The party-line split on the commission would probably delay votes on contentious Dodd-Frank regulations.