Comment Text:
Dear Sir or Madam,
I am hardly an expert on the subject of derivatives. However, I am aware they are foci of much controversy, since
many suspect the utilization of "bets", "hedges" are of a highly speculative, and thus potentially of severe risk as financial instruments. For example, it was widely reported that an entire county in California was bankrupted
due to some variant of these instruments.
I am very wary of derivatives, as I am wary of anything that cannot be explained, eventually, in laymen's terms.
The Frank-Dodd regulations, even with the Volker "May I?" rule will not be, in my view, adequate to reduce the amount of toxicity that continues to flow into the monetary system, nor will the system (as we have continued to
learn)be able to denude that toxicity to any meaningful (read: safe) level. The recent reports on Barclays, J.P.
("think-we-lost-a-billion-no-wait-two-billion") Morgan, the federal allegations of Forex manipulation by the BNY Mellon, hardly gives any comfort to the casual observer. Not to mention anything else that could be on the horizon, like any attempt, by collusion, to circumvent the implementation of the Basel II & III Accords.
I would urge, then, the Commission to seek out the best experts on these matters, and ask for their input in the wake of the dismantling of the Glass-Steagall Act, and the best course of action, to reduce the systemic risk
that undoubtedly exist as a result of something, (no, not technology or high finance) that hasn't changed all that much over the millennia: human nature. As Nelson Goodman once pointed out, much of our troubles results less
"from our abnegations as from our indulgences"
Kind Regards,
Charles E. Witteck, III
