Why I agreed with John

Author: | Published: 1 Sep 2009

As the US government debates reform of the financial system, including segments like over-the-counter (OTC) derivatives that had been largely ignored by regulators (often at the insistence or encouragement of Congress), the idea has emerged that all derivative instruments "on" a particular type of asset should be assigned to a single national regulator including, perhaps, re-assigning responsibility for derivatives like exchange-traded futures that are already effectively regulated by a different federal agency. For example, as there are both OTC derivatives and regulated futures contracts involving large stock indices like the S&P 500, why not drop both types into a single regulator?

In the course of this debate, an agreement announced on Pearl Harbor Day 1981 known as the Shad-Johnson Accord is often mentioned. John S R Shad was then the Chairman of the Securities and Exchange Commission (SEC) while I had the same post at the Commodity Futures Trading...