In a significant leadership change at the U.S. Commodity Futures Trading Commission (CFTC), Commissioner Kristin N. Johnson has been appointed the new sponsor of the agency’s Market Risk Advisory Committee (MRAC), stepping into the shoes of CFTC Chair Rostin Behnam. This swap took place on a Tuesday, making it one of those classic “not just another Monday” moments for the agency.
A Shift in Strategy
Johnson’s nomination came from President Joe Biden in September 2021, aligning her with fellow commissioner Christy Goldsmith Romero and Behnam, who transitioned from acting chair to permanent chair. After being sworn in on March 30, Johnson is ready to bring a new mindset to the CFTC, particularly with her background in risk management as a former law professor.
Insights from a Risk Management Pro
With over a decade of experience in risk management, Johnson is not one to shy away from the complexities of market oversight. “Having spent my career in risk management oversight, I appreciate the MRAC’s significant and critical role in advising the Commission on risk management in our markets,” she stated in her inaugural message as sponsor. Her focus is squarely on the evolving decentralized market structures in cryptocurrency and digital assets, areas she has ardently argued for stricter controls in her academic writings.
MRAC’s Diverse Constituency
The MRAC isn’t just a one-person show. It is a coalition of 36 industry leaders, including academics and regulators from various sectors. The committee is a melting pot that features voices from the Federal Reserve Banks of New York and Chicago, as well as notable figures like Chris Dickens, COO of HSBC, and Amy Hong, a managing director at Goldman Sachs. It’s like the Avengers, but for market risk management!
Upcoming Initiatives
Looking ahead, Johnson is set to deliver a keynote address at the FIA’s International Derivatives Expo in London on June 8. The topic? An exploration of an appropriate regulatory framework for “the burgeoning decentralized digital asset market.” That’s a mouthful and a half! It will be interesting to see how Johnson plans to unpack this complex issue.
The Road Ahead
As Johnson takes her place at the helm of MRAC, the focus will undoubtedly be on navigating the turbulent waters of modern market risks, especially with the increasing prominence of cryptos. The industry will be watching closely as she showcases her approach and expertise, which may very well redefine risk management strategies at the CFTC.
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