The election of a new US president has heightened speculation about a merger of the Commodity Futures Trading Commission with the Securities and Exchange Commission. Philip McBride Johnson, a former chairman of the CFTC, argues forcefully here that to combine the agencies would be a grave error. Derivatives markets are different from securities markets for good reasons, and each needs different approaches, to matters ranging from short selling to insider trading.
The election of Barack Obama as US president, determined to reform financial regulation, has given fresh vigour to speculation about a merger of the Commodity Futures Trading Commission with the Securities and Exchange Commission.
This gossip bubbles up with every change of administration, but this time it is boiling especially briskly because of the financial crisis. Obama’s nominees to head the two agencies – Gary Gensler for the CFTC and Mary Schapiro for the SEC – appear to have...