26/06/2008

Congress’s speculative trading agenda in MFA’s sights: Baker

US hedge funds say they are concerned that Congress will take action to curb speculative trading strategies after the US Presidential election in November, according to Richard Baker, the Managed Funds Association's president and chief executive.

Speculative trading by hedge funds and commodities traders has been blamed for the boom in commodities prices as well as keeping the current price of oil higher than it needs to be.

With the price of oil and other commodities likely to go up further as winter approaches, some fear that the Congress will be forced to take action. The MFA, which this week held its annual forum in Chicago, has vowed to take a stance on the issue to defuse such efforts.

"They are not going to enact anything significant bar a study resolution," Baker, a former Louisiana Republican who chaired the House capital markets subcommittee and now president of the MFA, told forum attendees this week.

Baker also said the association and its allies plan to intensify efforts to educate Congress and regulators that speculation is essential for supporting efficient market function.