FOR IMMEDIATE RELEASE September 25, 2008 |
Contact:
Senator Levin's Office Phone: 202.224.6221 |
Levin, Bingaman, Harkin Introduce Bill to Crack Down on Excessive Speculation in Energy and Agriculture Markets |
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WASHINGTON – Citing huge swings in the price of energy and food for American consumers, Senators Carl Levin (D-MI), Jeff Bingaman (D-NM) and Tom Harkin (D-IA) introduced legislation today to prevent excessive speculation and price manipulation in U.S. energy and agricultural markets. The Prevent Excessive Speculation Act would make changes in four critical areas: authorizing speculation limits in all energy and agricultural futures markets; closing the “swaps loophole” by regulating the over-the-counter market; closing the “London loophole” that allows U.S. crude oil traders to avoid speculation limits by trading on foreign exchanges; and requiring the Commodity Futures Trading Commission (CFTC) to revise the standards that allow traders who use futures markets to hedge their holdings to exceed the speculation limits that apply to everyone else. “Energy and food prices have been on a roller coaster, taking American consumers and the American economy on an unpredictable, expensive, and damaging ride,” said Levin. “With so much economic uncertainty, Congress needs to act now to prevent the unwarranted price spikes and crippling unpredictability that excessive speculation is causing in U.S. energy markets. Our bill takes a measured approach to strengthen enforcement, oversight, and disclosure in all energy and agricultural markets, and give the CFTC new tools to tamp down rampant speculation.” “The crisis in the financial sector makes it even more imperative that we shine a bright spotlight on these energy markets. Recent events have made it all too clear that we cannot consider the securities and commodities markets in isolation, as they’ve become intrinsically linked,” said Bingaman. “This legislation takes the first crucial steps in restoring transparency to energy-related swaps markets and provides federal regulators with real tools to guard against the kinds of systemic risk, for which taxpayers and consumers alike could end up footing the bill.” “American consumers continue to struggle with gasoline and energy prices that are dramatically higher than a year ago. The high energy prices are adversely affecting every sector of the U.S. economy from agriculture to manufacturing to services,” said Harkin. “We must assure consumers and businesses that the markets that affect the prices they pay are operating in a fair and transparent manner. This legislation will clarify and solidify the authority of the CFTC to oversee energy derivatives markets to assure the consuming public that these markets are operating fairly, above board and free of price manipulation and excessive speculation.” The Levin-Bingaman-Harkin bill is a collective effort, which includes a number of modified provisions from prior bills, including S. 3268 introduced by Majority Leader Harry Reid, to enact a set of strong yet workable measures to protect U.S. energy and agricultural markets from excessive speculation and price manipulation. Specifically, the legislation would:
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