US ACTS TO CURB COMMODITIES SPECULATORS AS PRESSURE MOUNTS

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New steps to curb speculation in commodity markets have been launched by US regulators in response to growing pressure from Washington lawmakers.

The Commodity Futures Trading Commission, the main regulator of commodity markets, told the US Congress yesterday that it was imposing “enhanced control” on dealing by Wall Street banks and forcing them to publish new data on their positions.

The CFTC's measures will focus on swaps, which are private contracts between investment banks and clients such as hedge funds or airlines that provide an exposure to commodity prices without investing directly in futures.

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The swap market is mostly unregulated, which some lawmakers in Washington have described as a loophole for speculators and blamed for high oil prices. Swap dealers also receive exemptions for speculative positions limits that apply to other speculators into the commodities markets.

The CFTC admitted in a report that there was “a need for greater transparency in the manner and amount of trading that occurs through swap dealers”.

The move signals a growing concern among regulators about the activities of financial investors into the commodities.

But in a rare dissident vote, Bart Chilton, one of the four CFTC commissioners, said the actions were insufficient. “I do not believe the Commission's recommendations go far enough,” he said.

Additional reporting by Joanna Chung in New York