Timothy Massad, the Treasury Department official responsible foroverseeing the U.S. rescue of banks and automakers after the creditcrisis, will be nominated to head the country's top derivativesregulator.

Massad, 57, will be nominated by President Barack Obama today tosucceed Gary Gensler as chairman of the Commodity Futures TradingCommission, an agency with expansive new authority under the 2010Dodd-Frank Act, according to a White House statement. Hisnomination requires Senate confirmation.

Massad would take over an agency that has put into place morethan 60 rules to regulate trading by banks including Goldman SachsGroup Inc. and JPMorgan Chase & Co. to help reduce risk andincrease transparency in the swaps market after largely unregulatedtrades helped fuel the crisis. The rules have yet to all takeeffect as the agency battles budget challenges as a result ofRepublican efforts in Congress to block Obama administrationefforts to increase its funding.

“Gensler has been purposefully aggressive both in theimplementation of the Dodd-Frank Act as well as his wish to expandthe CFTC's scope, and I simply don't believe Massad will beanywhere near as laser-focused as Gensler has been,” IsaacBoltansky, policy analyst at Compass Point Research & TradingLLC, said in a telephone interview.

White House spokeswoman Amy Brundage declined immediatecomment.

A former partner at Cravath, Swaine & Moore LLP in New York,Massad was a legal adviser to a congressional panel that oversawthe Troubled Asset Relief Program, which loaned billions of dollarsto banks and auto companies to help stabilize the economy duringthe 2008 crisis.

The program, which he then was confirmed to manage at Treasury,spurred a political backlash that drove congressional supportersfrom office in the 2010 election and fed criticism of WallStreet.

“Nobody ever wants to see TARP repeated. But the fact is, TARPis a program that did its job,” Massad said Sept. 30 at theBrookings Institution. “It has worked faster, better, and cheaperthan most people ever thought possible.”

As of Nov. 8, $421.54 billion had been disbursed under the TARPprogram, while $406.48 billion had been repaid, according to thelatest numbers from the Treasury Department.

Gensler's Standard

Senator Elizabeth Warren, a Massachusetts Democrat and formerlythe head of the TARP oversight panel, said she wants to hearfurther from Massad about steps he would take to reduce risk offuture crises.

“The CFTC does critical work, and Gary Gensler set a very highstandard for the chairman position,” Warren said in astatement.

The commission, which is designed to have five members, mayinstead have only one Democrat and one Republican early next yearif Obama and the Senate cannot overcome political hurdles toconfirm new commissioners.

Bart Chilton, a Democratic commissioner, said he will step downbefore next year, and the administration has yet to nominate hisreplacement. Jill E. Sommers, a Republican, stepped down from theCFTC in July and the Senate has failed to act on the nomination ofJ. Christopher Giancarlo as her successor.

The party-line split on the commission would probably delayvotes on contentious Dodd-Frank regulations.

Bloomberg News

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