ABSTRACT
A long-running debate over-the-counter (OTC) derivatives should be subject to regulation by the Commodity Futures Trading Commission (CFTC) began in the 1980s. The OTC derivative losses from the 1994 interest rate rise soon faded from memory, but concerns continued over the lack of regulation of OTC derivatives. The Securities and Exchange Commission (SEC) and the CFTC had long been in competition over the regulation of securities-based derivatives, with the CFTC winning most of their jurisdictional battles. One of the key items on the to-do list when the George W. Bush administration entered office was the development of a coherent energy policy. The result was that public attention was diverted from the policy issues that were causing higher energy prices to claims of manipulation by the CFTC, Federal Energy Regulatory Commission (FERC), and the Justice Department and demonizing of speculators by members of Congress. FERC had embarked on a program of deregulation of the energy markets before the California energy crisis.
