[Congressional Record Volume 143, Number 25 (Monday, March 3, 1997)]
[Senate]
[Pages S1843-S1844]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       CHICAGO BOARD OF TRADE AND THE CHICAGO MERCANTILE EXCHANGE

 Ms. MOSELEY-BRAUN. Mr. President, today's Chicago Sun-Times 
contained an editorial headlined, ``Loosen reins on CBOT, Merc.'' The 
editorial, talking about the Chicago Board of Trade, and the Chicago 
Mercantile Exchange, made the point that:
  ``Congress must loosen the regulatory reins on the Chicago Board of 
Trade and the Chicago Mercantile Exchange. Otherwise, officials argue 
convincingly, Chicago will lose business and jobs to the unregulated 
over the counter markets or overseas exchanges.''
  The Sun-Times had it exactly right. As in so many other areas of 
financial policy, the law has not kept up with economic reality. The 
world has changed. There is a revolution underway in finance, and, if 
the United States sits back and ignores the new realities of the 
marketplace, the result will be to seriously damage American financial 
marketplaces vis-a-vis their global competition, and to increasingly 
warp and distort the competition between and among various American 
financial markets.
  We must respond; we must respond vigorously; and we must respond now. 
Chicago's future and option exchanges

[[Page S1844]]

are an American treasure; their innovations literally created this 
industry and are in no small part responsible for American leadership 
in finance. And the creativity of the Chicago exchanges has had a huge 
payoff for the Chicago area. As the Sun-Times editorial pointed out:
  ``The stakes are high. For example, the exchanges calculate that have 
created 151,000 jobs in the Chicago area.''
  It is imperative, therefore, that we act quickly to reform the 
Commodity Futures Trading Act as quickly as possible, and that we do so 
in a way that enhances the ability of the American futures and options 
industry to meet both their less regulated competition here in the 
United States, and their evermore formidable competition abroad. I 
intend to work for quick enactment of the legislation put forward by 
the distinguished chairman of the Senate Agriculture Committee, Senator 
Lugar. I urge my colleagues to join me, and to ensure that a 
procompetitive, commonsense approach that allows the futures exchanges 
to meet and compete with all comers passes this body before the snow 
melts in Illinois.
  Mr. President, I ask that the full text of the Sun-Times editorial be 
printed in the Record.
  The editorial follows:

                      [From the Chicago Sun-Times]

                       Loosen Reins on CBOT, Merc

       The futures markets have made Chicago a powerful player in 
     world finance. Now that role is threatened by a regulatory 
     system hamstringing the ability of the Chicago exchanges to 
     compete in the rapidly changing global financial marketplace.
       Congress must loosen the regulatory reins on the Chicago 
     Board of Trade and the Chicago Mercantile Exchange. 
     Otherwise, officials argue convincingly, Chicago will lose 
     business and jobs to the unregulated over-the-counter markets 
     or to overseas exchanges. The stakes are high. For example, 
     the exchanges calculate that they have created 151,000 jobs 
     in the Chicago area.
       Exchange officials want Congress to lift all but a few 
     reasonable restrictions for markets that are used solely by 
     professional traders, money managers, mutual fund operators 
     and the like. Asking for a level playing field is a 
     reasonable request.
       For example, anyone who sells futures on the Chicago 
     exchanges must make regular reports on all trading activity 
     regardless of size. This costly paper trail could be replaced 
     with an on-call system. Also, anyone who sells futures is 
     fingerprinted, an unwelcome burden on exchange customers. 
     Over-the-counter markets require neither.
       The futures market is an arcane, volatile world, inhabited 
     mostly by people making their living taking huge risks and 
     big businesses seeking to hedge their risks. It is a 
     dangerous place for amateurs.
       But market professionals, without looser restrictions, will 
     move business out of Chicago to over-the counter or overseas 
     exchanges as the financial futures marketplace grows. 
     Congress should act on pending legislation to update the 
     rules for the CBOT and the Merc.
       The futures markets were to a large degree developed by 
     finance pioneers in Chicago. The city--and the nation--can 
     ill afford to see their role in world finance 
     diminished.

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