Friday, November 8, 2013
SECRETARY OF STATE KERRY ARRIVES IN GENEVA, SWITZERLAND
FROM: U.S. STATE DEPARTMENT
Remarks to the Press Upon Arrival in Geneva
Remarks
John Kerry
Secretary of State
Geneva, Switzerland
November 8, 2013
Good afternoon, everybody. It’s great to be here. The P51 is doing some very important work right now, and I’m delighted to be here at the invitation of Cathy Ashton to try to work with our colleagues to see if we can narrow some differences. I want to emphasize there are still some very important issues on the table that are unresolved. It is important for those to be properly, thoroughly addressed.
I want to emphasize there is not an agreement at this point in time, but the P51 is working hard, and I look forward to the meetings that I’ll be having very shortly with Lady Cathy Ashton and with my fellow ministers in the P5, and then also I will be meeting with Minister Zarif. We hope to try to narrow those differences, but I don’t think anybody should mistake that there are some important gaps that have to be closed.
So thank you very much. Appreciate it. Thank you.
Remarks to the Press Upon Arrival in Geneva
Remarks
John Kerry
Secretary of State
Geneva, Switzerland
November 8, 2013
Good afternoon, everybody. It’s great to be here. The P51 is doing some very important work right now, and I’m delighted to be here at the invitation of Cathy Ashton to try to work with our colleagues to see if we can narrow some differences. I want to emphasize there are still some very important issues on the table that are unresolved. It is important for those to be properly, thoroughly addressed.
I want to emphasize there is not an agreement at this point in time, but the P51 is working hard, and I look forward to the meetings that I’ll be having very shortly with Lady Cathy Ashton and with my fellow ministers in the P5, and then also I will be meeting with Minister Zarif. We hope to try to narrow those differences, but I don’t think anybody should mistake that there are some important gaps that have to be closed.
So thank you very much. Appreciate it. Thank you.
U.S. EMPLOYMENT SITUATION FOR OCTOBER 2013
FROM: U.S. LABOR DEPARTMENT
THE EMPLOYMENT SITUATION -- OCTOBER 2013
Total nonfarm payroll employment rose by 204,000 in October, and the
unemployment rate was little changed at 7.3 percent, the U.S. Bureau of
Labor Statistics reported today. Employment increased in leisure and
hospitality, retail trade, professional and technical services,
manufacturing, and health care.
Household Survey Data
Both the number of unemployed persons, at 11.3 million, and the
unemployment rate, at 7.3 percent, changed little in October. Among
the unemployed, however, the number who reported being on temporary
layoff increased by 448,000. This figure includes furloughed federal
employees who were classified as unemployed on temporary layoff under
the definitions used in the household survey. (Estimates of the
unemployed by reason, such as temporary layoff and job leavers, do not
sum to the official seasonally adjusted measure of total unemployed
because they are independently seasonally adjusted.) For more
information on the classification of workers affected by the federal
government shutdown, see the box note. (See tables A-1 and A-11.)
Among the major worker groups, the unemployment rates for adult men
(7.0 percent), adult women (6.4 percent), teenagers (22.2 percent),
whites (6.3 percent), blacks (13.1 percent), and Hispanics (9.1 percent)
showed little or no change in October. The jobless rate for Asians was
5.2 percent (not seasonally adjusted), little changed from a year
earlier. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or
more) was little changed at 4.1 million in October. These individuals
accounted for 36.1 percent of the unemployed. The number of long-term
unemployed has declined by 954,000 over the year. (See table A-12.)
The civilian labor force was down by 720,000 in October. The labor
force participation rate fell by 0.4 percentage point to 62.8 percent
over the month. Total employment as measured by the household survey
fell by 735,000 over the month and the employment-population ratio
declined by 0.3 percentage point to 58.3 percent. This employment
decline partly reflected a decline in federal government employment.
(See table A-1.)
The number of persons employed part time for economic reasons
(sometimes referred to as involuntary part-time workers) was little
changed at 8.1 million in October. These individuals were working part
time because their hours had been cut back or because they were unable
to find a full-time job. (See table A-8.)
In October, 2.3 million persons were marginally attached to the labor
force, little changed from 2.4 million a year earlier. (The data are
not seasonally adjusted.) These individuals were not in the labor
force, wanted and were available for work, and had looked for a job
sometime in the prior 12 months. They were not counted as unemployed
because they had not searched for work in the 4 weeks preceding the
survey. (See table A-16.)
Among the marginally attached, there were 815,000 discouraged workers
in October, essentially unchanged from a year earlier. (The data are
not seasonally adjusted.) Discouraged workers are persons not
currently looking for work because they believe no jobs are available
for them. The remaining 1.5 million persons marginally attached to the
labor force in October had not searched for work for reasons such as
school attendance or family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment increased by 204,000 in October. Job
growth averaged 190,000 per month over the prior 12 months. In
October, job gains occurred in leisure and hospitality, retail trade,
professional and technical services, manufacturing, and health care.
Federal government employment continued to trend down. There were no
discernible impacts of the partial federal government shutdown on the
estimates of employment, hours, and earnings from the establishment
survey. (See table B-1.)
Leisure and hospitality employment rose by 53,000 in October. Within
the industry, employment in food services and drinking places
increased by 29,000, the same as its average monthly gain over the
prior 12 months.
Employment in retail trade increased by 44,000 in October, compared
with an average monthly gain of 31,000 over the prior 12 months. Job
growth was widespread within the industry in October, with gains in
food and beverage stores (+12,000), electronics and appliance stores
(+10,000), sporting goods and hobby stores (+8,000), general
merchandise stores (+8,000), and building material and garden supply
stores (+7,000). Clothing and clothing accessories stores lost 13,000
jobs.
Professional and technical services employment rose in October
(+21,000) and has grown by 213,000 over the past 12 months. Within the
industry, employment in management and technical consulting services
rose by 8,000 in October.
Manufacturing added 19,000 jobs in October, with job growth occurring
in motor vehicles and parts (+6,000), wood products (+3,000), and
furniture and related products (+3,000). On net, manufacturing
employment has changed little since February 2013.
Health care employment increased over the month (+15,000). Job growth
in health care has averaged 17,000 per month thus far this year,
compared with an average monthly gain of 27,000 in 2012.
In October, employment showed little or no change elsewhere in the
private sector, including mining and logging, construction, wholesale
trade, transportation and warehousing, information, and financial
activities.
Federal government employment declined by 12,000 in October. Over the
past 12 months, federal government employment has decreased by 94,000.
Federal employees on furlough during the partial government shutdown
were still considered employed in the payroll survey because they
worked or received pay for the pay period that included the 12th of
the month. For more information on the classification of workers
affected by the partial federal government shutdown, see the box note.
The average workweek for all employees on private nonfarm payrolls was
unchanged in October at 34.4 hours. The manufacturing workweek was
40.9 hours, the same as in September, and factory overtime was
unchanged at 3.4 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls edged down by 0.1
hour to 33.6 hours. (See tables B-2 and B-7.)
In October, average hourly earnings for all employees on private
nonfarm payrolls edged up by 2 cents to $24.10. Over the year, average
hourly earnings have risen by 52 cents, or 2.2 percent. In October,
average hourly earnings of production and nonsupervisory employees
edged up by 2 cents to $20.26. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for August was revised
from +193,000 to +238,000, and the change for September was revised
from +148,000 to +163,000. With these revisions, employment gains in
August and September combined were 60,000 higher than previously
reported.
____________
The Employment Situation for November is scheduled to be released on
Friday, December 6, 2013, at 8:30 a.m. (EST).
Partial Federal Government Shutdown
Some agencies of the federal government were shut down or were operating at reduced staffing levels from October 1, 2013, through October 16, 2013. All household and establishment survey operations, including data collection, were suspended during that time period. Shortly after the shutdown ended, October data collection for both surveys began. The Bureau of Labor Statistics (BLS) delayed the publication of this release by 1 week to allow enough time to collect data. The reference periods for the surveys were not changed. The response rate for the household survey was within its normal range, and the response rate for the establishment survey was above average. In the household survey, individuals are classified as employed, unemployed, or not in the labor force based on their answers to a series of questions about their activities during the survey reference week. Workers who indicate that they were not working during the entire survey reference week and expected to be recalled to their jobs should be classified in the household survey as unemployed on temporary layoff. In October 2013, there was an increase in the number of federal workers who were classified as unemployed on temporary layoff. However, there also was an increase in the number of federal workers who were classified as employed but absent from work. BLS analysis of the data indicates that this group included federal workers affected by the shutdown who also should have been classified a unemployed on temporary layoff. Such a misclassification is an example of nonsampling error and can occur when respondents misunderstand questions or interviewers record answers incorrectly. According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions taken to reassign survey responses.
It should be noted that household survey data for federal workers are available only on a not seasonally adjusted basis. As a result, over-the-month changes in federal worker data series cannot be compared with seasonally adjusted over-the-month changes in total employed and unemployed. In the establishment survey, businesses report the number of people who work or receive pay for any part of the pay period that includes the 12th of the month. Persons who work or receive| pay for any part of the pay period are defined as employed. This method of classifying workers is the same in all industries, including the federal government. Federal employees on furlough during the partial federal government shutdown were still considered employed in the payroll survey because they worked or received pay for the pay period that included the 12th of the month.
Additional information is available online at www.bls.gov/bls/shutdown_2013_empsit_qa.pdf.
THE EMPLOYMENT SITUATION -- OCTOBER 2013
Total nonfarm payroll employment rose by 204,000 in October, and the
unemployment rate was little changed at 7.3 percent, the U.S. Bureau of
Labor Statistics reported today. Employment increased in leisure and
hospitality, retail trade, professional and technical services,
manufacturing, and health care.
Household Survey Data
Both the number of unemployed persons, at 11.3 million, and the
unemployment rate, at 7.3 percent, changed little in October. Among
the unemployed, however, the number who reported being on temporary
layoff increased by 448,000. This figure includes furloughed federal
employees who were classified as unemployed on temporary layoff under
the definitions used in the household survey. (Estimates of the
unemployed by reason, such as temporary layoff and job leavers, do not
sum to the official seasonally adjusted measure of total unemployed
because they are independently seasonally adjusted.) For more
information on the classification of workers affected by the federal
government shutdown, see the box note. (See tables A-1 and A-11.)
Among the major worker groups, the unemployment rates for adult men
(7.0 percent), adult women (6.4 percent), teenagers (22.2 percent),
whites (6.3 percent), blacks (13.1 percent), and Hispanics (9.1 percent)
showed little or no change in October. The jobless rate for Asians was
5.2 percent (not seasonally adjusted), little changed from a year
earlier. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or
more) was little changed at 4.1 million in October. These individuals
accounted for 36.1 percent of the unemployed. The number of long-term
unemployed has declined by 954,000 over the year. (See table A-12.)
The civilian labor force was down by 720,000 in October. The labor
force participation rate fell by 0.4 percentage point to 62.8 percent
over the month. Total employment as measured by the household survey
fell by 735,000 over the month and the employment-population ratio
declined by 0.3 percentage point to 58.3 percent. This employment
decline partly reflected a decline in federal government employment.
(See table A-1.)
The number of persons employed part time for economic reasons
(sometimes referred to as involuntary part-time workers) was little
changed at 8.1 million in October. These individuals were working part
time because their hours had been cut back or because they were unable
to find a full-time job. (See table A-8.)
In October, 2.3 million persons were marginally attached to the labor
force, little changed from 2.4 million a year earlier. (The data are
not seasonally adjusted.) These individuals were not in the labor
force, wanted and were available for work, and had looked for a job
sometime in the prior 12 months. They were not counted as unemployed
because they had not searched for work in the 4 weeks preceding the
survey. (See table A-16.)
Among the marginally attached, there were 815,000 discouraged workers
in October, essentially unchanged from a year earlier. (The data are
not seasonally adjusted.) Discouraged workers are persons not
currently looking for work because they believe no jobs are available
for them. The remaining 1.5 million persons marginally attached to the
labor force in October had not searched for work for reasons such as
school attendance or family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment increased by 204,000 in October. Job
growth averaged 190,000 per month over the prior 12 months. In
October, job gains occurred in leisure and hospitality, retail trade,
professional and technical services, manufacturing, and health care.
Federal government employment continued to trend down. There were no
discernible impacts of the partial federal government shutdown on the
estimates of employment, hours, and earnings from the establishment
survey. (See table B-1.)
Leisure and hospitality employment rose by 53,000 in October. Within
the industry, employment in food services and drinking places
increased by 29,000, the same as its average monthly gain over the
prior 12 months.
Employment in retail trade increased by 44,000 in October, compared
with an average monthly gain of 31,000 over the prior 12 months. Job
growth was widespread within the industry in October, with gains in
food and beverage stores (+12,000), electronics and appliance stores
(+10,000), sporting goods and hobby stores (+8,000), general
merchandise stores (+8,000), and building material and garden supply
stores (+7,000). Clothing and clothing accessories stores lost 13,000
jobs.
Professional and technical services employment rose in October
(+21,000) and has grown by 213,000 over the past 12 months. Within the
industry, employment in management and technical consulting services
rose by 8,000 in October.
Manufacturing added 19,000 jobs in October, with job growth occurring
in motor vehicles and parts (+6,000), wood products (+3,000), and
furniture and related products (+3,000). On net, manufacturing
employment has changed little since February 2013.
Health care employment increased over the month (+15,000). Job growth
in health care has averaged 17,000 per month thus far this year,
compared with an average monthly gain of 27,000 in 2012.
In October, employment showed little or no change elsewhere in the
private sector, including mining and logging, construction, wholesale
trade, transportation and warehousing, information, and financial
activities.
Federal government employment declined by 12,000 in October. Over the
past 12 months, federal government employment has decreased by 94,000.
Federal employees on furlough during the partial government shutdown
were still considered employed in the payroll survey because they
worked or received pay for the pay period that included the 12th of
the month. For more information on the classification of workers
affected by the partial federal government shutdown, see the box note.
The average workweek for all employees on private nonfarm payrolls was
unchanged in October at 34.4 hours. The manufacturing workweek was
40.9 hours, the same as in September, and factory overtime was
unchanged at 3.4 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls edged down by 0.1
hour to 33.6 hours. (See tables B-2 and B-7.)
In October, average hourly earnings for all employees on private
nonfarm payrolls edged up by 2 cents to $24.10. Over the year, average
hourly earnings have risen by 52 cents, or 2.2 percent. In October,
average hourly earnings of production and nonsupervisory employees
edged up by 2 cents to $20.26. (See tables B-3 and B-8.)
The change in total nonfarm payroll employment for August was revised
from +193,000 to +238,000, and the change for September was revised
from +148,000 to +163,000. With these revisions, employment gains in
August and September combined were 60,000 higher than previously
reported.
____________
The Employment Situation for November is scheduled to be released on
Friday, December 6, 2013, at 8:30 a.m. (EST).
Partial Federal Government Shutdown
Some agencies of the federal government were shut down or were operating at reduced staffing levels from October 1, 2013, through October 16, 2013. All household and establishment survey operations, including data collection, were suspended during that time period. Shortly after the shutdown ended, October data collection for both surveys began. The Bureau of Labor Statistics (BLS) delayed the publication of this release by 1 week to allow enough time to collect data. The reference periods for the surveys were not changed. The response rate for the household survey was within its normal range, and the response rate for the establishment survey was above average. In the household survey, individuals are classified as employed, unemployed, or not in the labor force based on their answers to a series of questions about their activities during the survey reference week. Workers who indicate that they were not working during the entire survey reference week and expected to be recalled to their jobs should be classified in the household survey as unemployed on temporary layoff. In October 2013, there was an increase in the number of federal workers who were classified as unemployed on temporary layoff. However, there also was an increase in the number of federal workers who were classified as employed but absent from work. BLS analysis of the data indicates that this group included federal workers affected by the shutdown who also should have been classified a unemployed on temporary layoff. Such a misclassification is an example of nonsampling error and can occur when respondents misunderstand questions or interviewers record answers incorrectly. According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions taken to reassign survey responses.
It should be noted that household survey data for federal workers are available only on a not seasonally adjusted basis. As a result, over-the-month changes in federal worker data series cannot be compared with seasonally adjusted over-the-month changes in total employed and unemployed. In the establishment survey, businesses report the number of people who work or receive pay for any part of the pay period that includes the 12th of the month. Persons who work or receive| pay for any part of the pay period are defined as employed. This method of classifying workers is the same in all industries, including the federal government. Federal employees on furlough during the partial federal government shutdown were still considered employed in the payroll survey because they worked or received pay for the pay period that included the 12th of the month.
Additional information is available online at www.bls.gov/bls/shutdown_2013_empsit_qa.pdf.
EDUCATION SECRETARY DUNCAN MAKES STATEMENT ON 2013 NAEP READING AND MATH REPORT CARD
FROM: U.S. EDUCATION DEPARTMENT
Statement of U.S. Secretary of Education Arne Duncan on the 2013 NAEP Reading and Mathematics Report Card
NOVEMBER 7, 2013
The 2013 NAEP Reading and Mathematics Report Card is available here.
"The 2013 NAEP report card provides encouraging but modest signs of progress in reading and math for U.S. students.
"In 2013, reading and math scores edged up nationally to new highs for fourth and eighth graders. It is particularly heartening that reading scores for eighth graders are up, after remaining relatively flat for the last decade.
"Achievement among the largest minority group in our nation's public schools—Hispanic students—is also up since 2011. And higher-achieving students as a whole are making more progress in reading and math than in recent years.
"While progress on the NAEP continues to vary among the states, all eight states that had implemented the state-crafted Common Core State Standards at the time of the 2013 NAEP assessment showed improvement in at least one of the Reading and/or Mathematics assessments from 2009 to 2013—and none of the eight states had a decline in scores.
"Given the rapid and comprehensive changes that America's educators are implementing in classrooms across the nation, it is to their credit that we are seeing the strongest performance in the history of the NAEP.
"Our national progress makes me optimistic that local leaders and educators are showing the way to raising standards and driving innovation in the next few years. It is encouraging to see progress in tough economic times, when so many states and local communities have struggled with significant cuts to their education budgets.
"Among states that are making progress, Tennessee, the District of Columbia, and Hawaii made noteworthy gains in eighth grade and fourth grade in reading and/or math from 2011 to 2013.
"Signs of progress on the NAEP—known as the nation's report card—are especially compelling because they cannot be attributed to teaching to the test or testing irregularities, such as cheating.
"While fourth and eighth grade achievement in math and reading has edged upward nationally since 2011, the increases are generally modest.
"And while students in each racial group identified in the NAEP showed improvement in some areas, it is very troubling that achievement gaps between white and black students, and white and Hispanic students, failed to narrow from 2011 to 2013.
"Even with the modest increase in math and reading achievement on the 2013 NAEP, U.S. students are still well behind their peers in top-performing nations.
"If America's students are to remain competitive in a knowledge-based economy, our public schools must greatly accelerate the rate of progress of the last four years and do more to narrow America's large achievement gaps. It is an urgent moral and economic imperative that our schools do a better job of preparing students for today's globally-competitive world."
Statement of U.S. Secretary of Education Arne Duncan on the 2013 NAEP Reading and Mathematics Report Card
NOVEMBER 7, 2013
The 2013 NAEP Reading and Mathematics Report Card is available here.
"The 2013 NAEP report card provides encouraging but modest signs of progress in reading and math for U.S. students.
"In 2013, reading and math scores edged up nationally to new highs for fourth and eighth graders. It is particularly heartening that reading scores for eighth graders are up, after remaining relatively flat for the last decade.
"Achievement among the largest minority group in our nation's public schools—Hispanic students—is also up since 2011. And higher-achieving students as a whole are making more progress in reading and math than in recent years.
"While progress on the NAEP continues to vary among the states, all eight states that had implemented the state-crafted Common Core State Standards at the time of the 2013 NAEP assessment showed improvement in at least one of the Reading and/or Mathematics assessments from 2009 to 2013—and none of the eight states had a decline in scores.
"Given the rapid and comprehensive changes that America's educators are implementing in classrooms across the nation, it is to their credit that we are seeing the strongest performance in the history of the NAEP.
"Our national progress makes me optimistic that local leaders and educators are showing the way to raising standards and driving innovation in the next few years. It is encouraging to see progress in tough economic times, when so many states and local communities have struggled with significant cuts to their education budgets.
"Among states that are making progress, Tennessee, the District of Columbia, and Hawaii made noteworthy gains in eighth grade and fourth grade in reading and/or math from 2011 to 2013.
"Signs of progress on the NAEP—known as the nation's report card—are especially compelling because they cannot be attributed to teaching to the test or testing irregularities, such as cheating.
"While fourth and eighth grade achievement in math and reading has edged upward nationally since 2011, the increases are generally modest.
"And while students in each racial group identified in the NAEP showed improvement in some areas, it is very troubling that achievement gaps between white and black students, and white and Hispanic students, failed to narrow from 2011 to 2013.
"Even with the modest increase in math and reading achievement on the 2013 NAEP, U.S. students are still well behind their peers in top-performing nations.
"If America's students are to remain competitive in a knowledge-based economy, our public schools must greatly accelerate the rate of progress of the last four years and do more to narrow America's large achievement gaps. It is an urgent moral and economic imperative that our schools do a better job of preparing students for today's globally-competitive world."
EDUCATION DEPARTMENT ANNOUNCES RESULTS FOR 2013 NEAP ASSESSMENTS FOR READING AND MATH
FROM: U.S. EDUCATION DEPARTMENT
Results for 2013 NAEP Mathematics and Reading Assessments Are In
Results from the 2013 NAEP assessments show fourth- and eighth-graders making progress in mathematics and reading.
Nationally representative samples of more than 376,000 fourth-graders and 341,000 eighth-graders were assessed in either mathematics or reading in 2013. Results are reported for public and private school students in the nation, and for public school students in all 50 states, the District of Columbia, and Department of Defense schools.
Average mathematics scores for fourth- and eighth-graders in 2013 were 1 point higher than in 2011, and 28 and 22 points higher respectively in comparison to the first assessment year in 1990.
Hispanic students made gains in mathematics from 2011 to 2013 at both grades 4 and 8.
Fourth- and eighth-grade female students scored higher in mathematics in 2013 than in 2011, but the scores for fourth- and eighth-grade male students did not change significantly over the same period.
OThe average reading score for eighth-graders was 2 points higher in 2013 than in 2011, but the score for fourth-graders did not change significantly from 2011. Reading scores were higher in 2013 than in 1992 at both grades.
White, Black, Hispanic, and Asian/Pacific Islander eighth-graders scored higher in reading in 2013 than in 2011.
Both male and female eighth-graders scored higher in reading in 2013 than in 2011.
Mathematics scores were higher in 2013 than in 2011 at both grades in Hawaii, Tennessee, the District of Columbia, and Department of Defense schools.
Reading scores were higher in 2013 than in 2011 at both grades in Iowa, Tennessee, Washington, the District of Columbia, and Department of Defense schools.
CFTC CHAIRMAN GENSLER'S REMARKS BEFORE FUTURES INDUSTRY ASSOCIATION
FROM: COMMODITY FUTURES TRADING COMMISSION
A Transformed Marketplace – Remarks of Chairman Gary Gensler's before the FIA 2013 Futures & Options Expo
November 6, 2013
Thank you, Walt, for that kind introduction. I also would like to thank the Futures Industry Association (FIA) for the invitation – I’m honored that you’ve invited me to speak each of these last five years.
Ever since Adam Smith and the Wealth of Nations, economists have consistently written that access to and transparency in markets benefits the broad public.
President Roosevelt understood this when he asked Congress during the Great Depression to bring transparency, access and competition to the commodities and securities markets.
The reforms of the 1930s transformed markets. They helped establish the foundation for the U.S. economic growth engine for decades.
Those reforms have given farmers, ranchers, producers, merchants and commercial companies confidence to use the futures market to manage their risks. They are able to lock in the price of a commodity at harvest time, or lock in an interest rate or currency rate, and focus on that which they do best – producing goods and services for the economy.
The swaps market emerged in the 1980s. It remained outside these time-tested reforms until last year.
Both futures and swaps, though, are just two forms of the same thing – derivatives. Both had become essential to our economy and to the way people and businesses manage risks.
The swaps market also had grown to dwarf the futures market in total notional outstanding. We now know the swaps market is $400 trillion in size, compared to the $30 trillion futures market.
Lacking of common-sense rules of the road, the swaps market contributed to the 2008 crisis. Need I remind anyone about AIG.
It became time to bring this vast, dark market into transparency. It became time to ensure that the broad public gained the benefits of central clearing and oversight of dealers.
Thus, the President and Congress passed reform borrowing from what had worked best for decades in the futures market.
Now, the swaps marketplace has been transformed.
It’s been a remarkable journey these past five years – and all of you have been part of this journey. It not only took 65 finalized rules, orders and guidances by the CFTC. Your thousands of comments, meetings and questions were a critical part of the process as well. You worked hard – with real costs and against deadlines – to implement these reforms to bring us to a new marketplace.
Transparency
Foremost, the swaps marketplace now has transparency that simply did not exist in 2008.
The public now can see the price and volume of each swap transaction as it occurs. This post-trade transparency spans the entire market, regardless of product, counterparty, or whether it’s a standardized or customized transaction.
This information is available, free of charge, to everyone in the public. The data is listed in real time – like a modern-day tickertape – on the websites of each of the three swap data repositories.
Regulators get even greater transparency. Though there is more work to be done regarding the data flowing into data repositories, we now are able to see and filter the details on each of the 1.8 million transactions and positions in the data repositories.
Further, starting last month, the public – for the first time – has been benefitting from new transparency, access and competition on regulated swap trading platforms.
Economists have known the benefits of such transparency since the time of Adam Smith; it just wasn’t a reality in the swaps marketplace.
Now, as a result of reforms, swap execution facilities (SEFs) are required to provide all market participants with impartial access. They must provide dealers and non-dealers alike the ability to make and respond to bids, offers and requests for quotes. This is a basic tenant that Adam Smith and so many economists have laid out – that access and transparency promote competition and benefit the economy.
We now have 18 temporarily registered SEFs where more than a quarter of a trillion dollars in swaps trading is occurring on average per day. That is a big number by any measure.
We’ll continue to address questions as they arise to help smooth the transition to the transparency and impartial access of exchange trading.
Addressing one such question, as our cross border guidance directs, if a multilateral trading platform is a U.S. person, or it is located or operating in the U.S., it should register.
A multilateral trading platform that provides persons located in the U.S. with the ability to trade or execute swaps on the platform’s market (either directly or indirectly through an intermediary), should register.
Registration applies whether those persons are U.S. persons or non-U.S. persons whose personnel or agents are located in the U.S. This is regardless of the location where the swap is ultimately booked, including in circumstances where a swap dealer arranges, negotiates, or executes the terms of a swap in a non-U.S. branch, but trades swaps on a multilateral swaps trading platform using personnel or agents of the swap dealer located in the U.S.
This will trigger some SEF registrations for foreign-based platforms that are already registered with their home country. For instance, one Australian platform is going to register with the CFTC, and we’re working with the Australian home country regulators. We’re prepared to figure out where we might defer to those home country regulators.
Clearing
Second, the swaps market has been transformed to a market with mandated central clearing for financial entities as well as dealers.
Customers now gain the benefit that until recently only dealers had. Central clearing of swaps lowers risk and allows customers more ready access to the market.
Clearinghouses have operated successfully at the center of the futures market for over 100 years – through two world wars, the Great Depression and the 2008 financial crisis.
Reforms have taken us from only 21 percent of the interest rate swaps market being cleared in 2008 to 80 percent during the week ending October 25, 2013.
That same week, we saw 62 percent of new credit index swaps being cleared.
Further, we no longer have the significant time delays that were once associated with swaps clearing.
Five years ago, swaps clearing happened either at the end of the day or even just once a week. This left a significant period of bilateral credit risk in the market, undermining one of the key benefits of central clearing.
Now reforms require pre-trade credit checks and straight-through processing for swaps trades intended for clearing.
As a result, 99 percent of swaps clearing occurs within 10 seconds, with 93 percent actually doing so within three seconds. No longer do market participants have to worry about credit risk when entering into swaps trades intended to be cleared.
Thus, breakage agreements – agreements that had been requested by dealers in the event a swap wasn’t accepted for clearing – are not needed and should not be required for access to trading on a SEF or designated contract market.
Taken as a whole, these reforms have completely transformed the swaps market to a new marketplace.
Swap Dealers
Third, the market has been transformed for swap dealer.
In 2008, swap dealers had no specific requirements with regard to their swap dealing activity.
Today, with 90 swap dealers registered, all of the world’s largest financial institutions in the global swaps market are coming under reforms.
These reforms include new business conduct standards for risk management, documentation of swap transactions, confirmations, sales practices, recordkeeping and reporting.
Just to note how significant this is – this past summer, swap dealers and their over 10,000 counterparties around the globe changed their swap documentation, lowering risk by cleaning up the back office.
These documentation reforms build on what the Federal Reserve Bank of New York had tried to achieve with dealers voluntarily.
I would note from my own experience in the financial community, those back office documents really matter in a bankruptcy or other crisis.
International Coordination on Swap Market Reform
Further, the transformed marketplace covers the far-flung operations of U.S. enterprises.
Congress was clear in the Dodd-Frank Act that we had to learn the lessons of the 2008 crisis.
AIG nearly brought down the U.S. economy through its guaranteed affiliate operating under a French bank license in London.
Lehman Brothers had 3,300 legal entities when it failed. Its main overseas affiliate was guaranteed here in the U.S., and it had 130,000 outstanding swap transactions.
A decade earlier, Long-Term Capital Management was operating out of Connecticut but actually booked their $1.2 trillion derivatives book in the Cayman Islands.
Based upon CFTC guidance, swaps market reform covers transactions between non-U.S. swap dealers and guaranteed affiliates of U.S. persons, as well as swaps between two guaranteed affiliates.
As of last month, offshore branches and guaranteed affiliates, as well as hedge funds, like Long-Term Capital Management, all had to come into central clearing and the other Dodd-Frank reforms.
Customer Protection
Market events of the last two years also highlighted the need to further ensure the protection of customer funds.
Segregation of customer funds is the core foundation of the commodity futures and swaps markets.
Segregation must be maintained at all times. That means every moment of every day.
The CFTC went through a two-year process with market participants, including significant input from the FIA, to ensure that customers have confidence that their funds are segregated and protected. Last week, the sixth set of customer protection rules were finalized by the Commission.
The Future
Before I take questions, I wanted to share a few thoughts looking forward.
First there will be the continued implementation of reforms. Among the highlights is the trade execution mandate likely going live in the first quarter of 2014. Also, there is the critical implementation of the recently completed customer protection rules. The CFTC will continue pivoting from rulewriting to ensuring compliance with these reforms.
Second, it is critical that we preserve the pre-trade transparency that has been a longstanding hallmark of the futures market. The Commission finalized a block rules for swaps and soon will consider staff recommendations for a proposal on a futures block rule.
Third, we have witnessed a fundamental shift in markets from human-based trading to highly automated trading. The Commission looks forward to hearing back on our concept release on automated and high frequency trading.
Fourth, we must deal with the fact that LIBOR is more akin to fiction than fact. Through five settlements the CFTC has brought against banks, we have seen how the public trust can be violated through bad actors readily manipulating benchmark interest rates. As LIBOR and Euribor are not anchored in observable transactions, they have been and can be again readily and pervasively rigged.
The work of the Financial Stability Board to find alternatives and consider potential transitions to these alternatives is critical. This will mean significant changes in the futures and swaps markets. There is a need for these reforms, though, if we’re going to protect the integrity of the markets.
CFTC Resources
Lastly, one of the greatest threats to well-functioning, open, and competitive futures and swaps markets is that the CFTC – the agency tasked with overseeing your markets – is not sized to the task at hand.
That the CFTC completed 65 rulemakings should not be confused with the agency having sufficient people and technology to oversee the markets.
At 673 people, we are only slightly larger than we were 20 years ago. Since then though, the futures market has grown and changed significantly. Further, we have this new job of overseeing the vast swaps market.
The overall branding of these markets is dependent on customers having confidence in using them.
It’s also critical that we have the resources for the timely reviews of applications, registrations, petitions and answers to market participants’ questions.
The President has asked for $315 million for the CFTC. This year we’ve been operating with only $195 million.
Worse yet, as a result of continued funding challenges, sequestration, and a required minimum level Congress set for the CFTC’s outside technology spending, the CFTC already has shrunk 5 percent, and was forced to notify employees of an administrative furlough for up to 14 days this fiscal year.
Congress and the President have real challenges with regard to our federal budget. I believe, though, that the CFTC is a good investment for the American public. It’s a good investment for transparent, well-functioning markets.
Conclusion
Let me close by thanking all of you. These last five years have been a remarkable journey. The futures market performed well straight through the crisis. That’s why we borrowed so much from the futures market in an effort to bring much-needed reform to the swaps market.
On a personal note, I want to thank you for all that we’ve achieved together. I want to thank you because this may be my last speech as the CFTC’s Chairman at an FIA conference. I assure you, though, if invited, I’ll be with you again.
Thank you, I look forward to answering your questions.
A Transformed Marketplace – Remarks of Chairman Gary Gensler's before the FIA 2013 Futures & Options Expo
November 6, 2013
Thank you, Walt, for that kind introduction. I also would like to thank the Futures Industry Association (FIA) for the invitation – I’m honored that you’ve invited me to speak each of these last five years.
Ever since Adam Smith and the Wealth of Nations, economists have consistently written that access to and transparency in markets benefits the broad public.
President Roosevelt understood this when he asked Congress during the Great Depression to bring transparency, access and competition to the commodities and securities markets.
The reforms of the 1930s transformed markets. They helped establish the foundation for the U.S. economic growth engine for decades.
Those reforms have given farmers, ranchers, producers, merchants and commercial companies confidence to use the futures market to manage their risks. They are able to lock in the price of a commodity at harvest time, or lock in an interest rate or currency rate, and focus on that which they do best – producing goods and services for the economy.
The swaps market emerged in the 1980s. It remained outside these time-tested reforms until last year.
Both futures and swaps, though, are just two forms of the same thing – derivatives. Both had become essential to our economy and to the way people and businesses manage risks.
The swaps market also had grown to dwarf the futures market in total notional outstanding. We now know the swaps market is $400 trillion in size, compared to the $30 trillion futures market.
Lacking of common-sense rules of the road, the swaps market contributed to the 2008 crisis. Need I remind anyone about AIG.
It became time to bring this vast, dark market into transparency. It became time to ensure that the broad public gained the benefits of central clearing and oversight of dealers.
Thus, the President and Congress passed reform borrowing from what had worked best for decades in the futures market.
Now, the swaps marketplace has been transformed.
It’s been a remarkable journey these past five years – and all of you have been part of this journey. It not only took 65 finalized rules, orders and guidances by the CFTC. Your thousands of comments, meetings and questions were a critical part of the process as well. You worked hard – with real costs and against deadlines – to implement these reforms to bring us to a new marketplace.
Transparency
Foremost, the swaps marketplace now has transparency that simply did not exist in 2008.
The public now can see the price and volume of each swap transaction as it occurs. This post-trade transparency spans the entire market, regardless of product, counterparty, or whether it’s a standardized or customized transaction.
This information is available, free of charge, to everyone in the public. The data is listed in real time – like a modern-day tickertape – on the websites of each of the three swap data repositories.
Regulators get even greater transparency. Though there is more work to be done regarding the data flowing into data repositories, we now are able to see and filter the details on each of the 1.8 million transactions and positions in the data repositories.
Further, starting last month, the public – for the first time – has been benefitting from new transparency, access and competition on regulated swap trading platforms.
Economists have known the benefits of such transparency since the time of Adam Smith; it just wasn’t a reality in the swaps marketplace.
Now, as a result of reforms, swap execution facilities (SEFs) are required to provide all market participants with impartial access. They must provide dealers and non-dealers alike the ability to make and respond to bids, offers and requests for quotes. This is a basic tenant that Adam Smith and so many economists have laid out – that access and transparency promote competition and benefit the economy.
We now have 18 temporarily registered SEFs where more than a quarter of a trillion dollars in swaps trading is occurring on average per day. That is a big number by any measure.
We’ll continue to address questions as they arise to help smooth the transition to the transparency and impartial access of exchange trading.
Addressing one such question, as our cross border guidance directs, if a multilateral trading platform is a U.S. person, or it is located or operating in the U.S., it should register.
A multilateral trading platform that provides persons located in the U.S. with the ability to trade or execute swaps on the platform’s market (either directly or indirectly through an intermediary), should register.
Registration applies whether those persons are U.S. persons or non-U.S. persons whose personnel or agents are located in the U.S. This is regardless of the location where the swap is ultimately booked, including in circumstances where a swap dealer arranges, negotiates, or executes the terms of a swap in a non-U.S. branch, but trades swaps on a multilateral swaps trading platform using personnel or agents of the swap dealer located in the U.S.
This will trigger some SEF registrations for foreign-based platforms that are already registered with their home country. For instance, one Australian platform is going to register with the CFTC, and we’re working with the Australian home country regulators. We’re prepared to figure out where we might defer to those home country regulators.
Clearing
Second, the swaps market has been transformed to a market with mandated central clearing for financial entities as well as dealers.
Customers now gain the benefit that until recently only dealers had. Central clearing of swaps lowers risk and allows customers more ready access to the market.
Clearinghouses have operated successfully at the center of the futures market for over 100 years – through two world wars, the Great Depression and the 2008 financial crisis.
Reforms have taken us from only 21 percent of the interest rate swaps market being cleared in 2008 to 80 percent during the week ending October 25, 2013.
That same week, we saw 62 percent of new credit index swaps being cleared.
Further, we no longer have the significant time delays that were once associated with swaps clearing.
Five years ago, swaps clearing happened either at the end of the day or even just once a week. This left a significant period of bilateral credit risk in the market, undermining one of the key benefits of central clearing.
Now reforms require pre-trade credit checks and straight-through processing for swaps trades intended for clearing.
As a result, 99 percent of swaps clearing occurs within 10 seconds, with 93 percent actually doing so within three seconds. No longer do market participants have to worry about credit risk when entering into swaps trades intended to be cleared.
Thus, breakage agreements – agreements that had been requested by dealers in the event a swap wasn’t accepted for clearing – are not needed and should not be required for access to trading on a SEF or designated contract market.
Taken as a whole, these reforms have completely transformed the swaps market to a new marketplace.
Swap Dealers
Third, the market has been transformed for swap dealer.
In 2008, swap dealers had no specific requirements with regard to their swap dealing activity.
Today, with 90 swap dealers registered, all of the world’s largest financial institutions in the global swaps market are coming under reforms.
These reforms include new business conduct standards for risk management, documentation of swap transactions, confirmations, sales practices, recordkeeping and reporting.
Just to note how significant this is – this past summer, swap dealers and their over 10,000 counterparties around the globe changed their swap documentation, lowering risk by cleaning up the back office.
These documentation reforms build on what the Federal Reserve Bank of New York had tried to achieve with dealers voluntarily.
I would note from my own experience in the financial community, those back office documents really matter in a bankruptcy or other crisis.
International Coordination on Swap Market Reform
Further, the transformed marketplace covers the far-flung operations of U.S. enterprises.
Congress was clear in the Dodd-Frank Act that we had to learn the lessons of the 2008 crisis.
AIG nearly brought down the U.S. economy through its guaranteed affiliate operating under a French bank license in London.
Lehman Brothers had 3,300 legal entities when it failed. Its main overseas affiliate was guaranteed here in the U.S., and it had 130,000 outstanding swap transactions.
A decade earlier, Long-Term Capital Management was operating out of Connecticut but actually booked their $1.2 trillion derivatives book in the Cayman Islands.
Based upon CFTC guidance, swaps market reform covers transactions between non-U.S. swap dealers and guaranteed affiliates of U.S. persons, as well as swaps between two guaranteed affiliates.
As of last month, offshore branches and guaranteed affiliates, as well as hedge funds, like Long-Term Capital Management, all had to come into central clearing and the other Dodd-Frank reforms.
Customer Protection
Market events of the last two years also highlighted the need to further ensure the protection of customer funds.
Segregation of customer funds is the core foundation of the commodity futures and swaps markets.
Segregation must be maintained at all times. That means every moment of every day.
The CFTC went through a two-year process with market participants, including significant input from the FIA, to ensure that customers have confidence that their funds are segregated and protected. Last week, the sixth set of customer protection rules were finalized by the Commission.
The Future
Before I take questions, I wanted to share a few thoughts looking forward.
First there will be the continued implementation of reforms. Among the highlights is the trade execution mandate likely going live in the first quarter of 2014. Also, there is the critical implementation of the recently completed customer protection rules. The CFTC will continue pivoting from rulewriting to ensuring compliance with these reforms.
Second, it is critical that we preserve the pre-trade transparency that has been a longstanding hallmark of the futures market. The Commission finalized a block rules for swaps and soon will consider staff recommendations for a proposal on a futures block rule.
Third, we have witnessed a fundamental shift in markets from human-based trading to highly automated trading. The Commission looks forward to hearing back on our concept release on automated and high frequency trading.
Fourth, we must deal with the fact that LIBOR is more akin to fiction than fact. Through five settlements the CFTC has brought against banks, we have seen how the public trust can be violated through bad actors readily manipulating benchmark interest rates. As LIBOR and Euribor are not anchored in observable transactions, they have been and can be again readily and pervasively rigged.
The work of the Financial Stability Board to find alternatives and consider potential transitions to these alternatives is critical. This will mean significant changes in the futures and swaps markets. There is a need for these reforms, though, if we’re going to protect the integrity of the markets.
CFTC Resources
Lastly, one of the greatest threats to well-functioning, open, and competitive futures and swaps markets is that the CFTC – the agency tasked with overseeing your markets – is not sized to the task at hand.
That the CFTC completed 65 rulemakings should not be confused with the agency having sufficient people and technology to oversee the markets.
At 673 people, we are only slightly larger than we were 20 years ago. Since then though, the futures market has grown and changed significantly. Further, we have this new job of overseeing the vast swaps market.
The overall branding of these markets is dependent on customers having confidence in using them.
It’s also critical that we have the resources for the timely reviews of applications, registrations, petitions and answers to market participants’ questions.
The President has asked for $315 million for the CFTC. This year we’ve been operating with only $195 million.
Worse yet, as a result of continued funding challenges, sequestration, and a required minimum level Congress set for the CFTC’s outside technology spending, the CFTC already has shrunk 5 percent, and was forced to notify employees of an administrative furlough for up to 14 days this fiscal year.
Congress and the President have real challenges with regard to our federal budget. I believe, though, that the CFTC is a good investment for the American public. It’s a good investment for transparent, well-functioning markets.
Conclusion
Let me close by thanking all of you. These last five years have been a remarkable journey. The futures market performed well straight through the crisis. That’s why we borrowed so much from the futures market in an effort to bring much-needed reform to the swaps market.
On a personal note, I want to thank you for all that we’ve achieved together. I want to thank you because this may be my last speech as the CFTC’s Chairman at an FIA conference. I assure you, though, if invited, I’ll be with you again.
Thank you, I look forward to answering your questions.
OSHA PROPOSES NEW RULE TO TRACK WORKPLACE INJURIES AND ILLNESSES
FROM: U.S. LABOR DEPARTMENT
OSHA announces proposed new rule to improve tracking of workplace injuries and illnesses
WASHINGTON — The Occupational Safety and Health Administration today issued a proposed rule to improve workplace safety and health through improved tracking of workplace injuries and illnesses. The announcement follows the Bureau of Labor Statistics' release of its annual Occupational Injuries and Illnesses report, which estimates that three million workers were injured on the job in 2012.
"Three million injuries are three million too many," said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. "With the changes being proposed in this rule, employers, employees, the government and researchers will have better access to data that will encourage earlier abatement of hazards and result in improved programs to reduce workplace hazards and prevent injuries, illnesses and fatalities. The proposal does not add any new requirement to keep records; it only modifies an employer's obligation to transmit these records to OSHA."
The public will have 90 days, through Feb. 6, 2014, to submit written comments on the proposed rule. On Jan. 9, 2014, OSHA will hold a public meeting on the proposed rule in Washington, D.C. A Federal Register notice announcing the public meeting will be published shortly.
The proposed rule was developed following a series of stakeholder meetings in 2010 to help OSHA gather information about electronic submission of establishment-specific injury and illness data. OSHA is proposing to amend its current recordkeeping regulations to add requirements for the electronic submission of injury and illness information employers are already required to keep under existing standards, Part 1904. The first proposed new requirement is for establishments with more than 250 employees (and who are already required to keep records) to electronically submit the records on a quarterly basis to OSHA.
OSHA is also proposing that establishments with 20 or more employees, in certain industries with high injury and illness rates, be required to submit electronically only their summary of work-related injuries and illnesses to OSHA once a year. Currently, many such firms report this information to OSHA under OSHA's Data Initiative.
OSHA plans to eventually post the data online, as encouraged by President Obama's Open Government Initiative. Timely, establishment-specific injury and illness data will help OSHA target its compliance assistance and enforcement resources more effectively by identifying workplaces where workers are at greater risk, and enable employers to compare their injury rates with others in the same industry. Additional information on the proposed rule can be found at http://www.dol.gov/find/20131107/ and http://www.osha.gov/recordkeeping/proposed_data_form.html.
OSHA announces proposed new rule to improve tracking of workplace injuries and illnesses
WASHINGTON — The Occupational Safety and Health Administration today issued a proposed rule to improve workplace safety and health through improved tracking of workplace injuries and illnesses. The announcement follows the Bureau of Labor Statistics' release of its annual Occupational Injuries and Illnesses report, which estimates that three million workers were injured on the job in 2012.
"Three million injuries are three million too many," said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. "With the changes being proposed in this rule, employers, employees, the government and researchers will have better access to data that will encourage earlier abatement of hazards and result in improved programs to reduce workplace hazards and prevent injuries, illnesses and fatalities. The proposal does not add any new requirement to keep records; it only modifies an employer's obligation to transmit these records to OSHA."
The public will have 90 days, through Feb. 6, 2014, to submit written comments on the proposed rule. On Jan. 9, 2014, OSHA will hold a public meeting on the proposed rule in Washington, D.C. A Federal Register notice announcing the public meeting will be published shortly.
The proposed rule was developed following a series of stakeholder meetings in 2010 to help OSHA gather information about electronic submission of establishment-specific injury and illness data. OSHA is proposing to amend its current recordkeeping regulations to add requirements for the electronic submission of injury and illness information employers are already required to keep under existing standards, Part 1904. The first proposed new requirement is for establishments with more than 250 employees (and who are already required to keep records) to electronically submit the records on a quarterly basis to OSHA.
OSHA is also proposing that establishments with 20 or more employees, in certain industries with high injury and illness rates, be required to submit electronically only their summary of work-related injuries and illnesses to OSHA once a year. Currently, many such firms report this information to OSHA under OSHA's Data Initiative.
OSHA plans to eventually post the data online, as encouraged by President Obama's Open Government Initiative. Timely, establishment-specific injury and illness data will help OSHA target its compliance assistance and enforcement resources more effectively by identifying workplaces where workers are at greater risk, and enable employers to compare their injury rates with others in the same industry. Additional information on the proposed rule can be found at http://www.dol.gov/find/20131107/ and http://www.osha.gov/recordkeeping/proposed_data_form.html.
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