Obama Taps Treasury's Bailout Lawyer To Lead Derivatives Watchdog
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President Obama this afternoon announced his choice to lead the Commodity Futures Trading Commission, or CFTC. Timothy Massad is not well-known but, if confirmed, he will wield a lot of influence over financial markets.
NPR's Yuki Noguchi reports on who Massad is and the challenge he faces.
YUKI NOGUCHI, BYLINE: Until now, Timothy Massad has been a behind-the-scenes man. He spent a quarter of a century as a securities lawyer, brokering deals for large firms. And more recently, at the Treasury Department, he's been in charge of clawing back as much money as possible from banks participating in the Troubled Asset Relief Program, also known as TARP, or the bailout. Speaking today at the White House, President Obama noted how Massad managed to get a $31 billion profit for U.S. taxpayers.
PRESIDENT BARACK OBAMA: For the past few years, Tim has been charged with, let's face it, the thankless task of winding down a program that no one ever particularly liked.
NOGUCHI: The president applauded Massad's low-key effectiveness.
OBAMA: Tim's a guy who doesn't seek the spotlight but he consistently delivers. He gets a high return for American taxpayers without a lot of fanfare. I have every confidence that he is the right man to lead an agency designed to prevent future crises because, I think it's safe to say, that he never wants to have to manage something like TARP again.
NOGUCHI: Massad replaces Gary Gensler, a former Goldman Sachs executive who developed a reputation at the CFTC for defying Wall Street's lobbyists and pushing for financial reform. But there's little in Massad's record to indicate how he would lead the CFTC and the positions he might take on some of the key financial reform issues facing the commission. Dennis Kelleher is president and CEO of Better Markets, a public advocacy group that pushes for tighter bank regulation.
DENNIS KELLEHER: I mean, he's really flown under the radar, although he's been in a couple of key positions.
NOGUCHI: Kelleher says the CFTC's main job right now is to implement rules from the Dodd-Frank financial law that will help prevent this sort of financial crisis that inspired that law.
KELLEHER: It was largely derivatives and derivative speculation that caused that crisis, and that's the jurisdiction of the CFTC. And that's what the next chairman of the CFTC has to make sure never happens again.
NOGUCHI: Other issues before the commission include regulating high-frequency or computer-based trading and how to regulate trading in basic commodities like gas and wheat. Kelleher says it's potentially a politically thankless job and one that will draw plenty of Capitol Hill scrutiny.
KELLEHER: It's a critical time for the CFTC. It is severely underfunded. It's grossly understaffed. It's technologically outgunned. It's a political pinata. And it's under constant attack from Wall Street.
NOGUCHI: Massad and J. Christopher Giancarlo, a Republican nominated to join the commission, must be confirmed by the Senate. Yuki Noguchi, NPR News, Washington.