YouSaid · the spoken record

Rostin Behnam

lines on the record: 78
first: 2021-02-22
most recent: 2021-02-22
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Biggest mistake I made. It kind of goes to my patients thing. I think when I mentioned an earlier in the hour that after 9-11 I left my job on the trading desk and went to law school and I was in a rush and I didn't think about things. And I think as a young person, especially in our world today, you're always sort of reaching and if you're ambitious, you're always wanting to do things as quick as possible. On the one hand, I reflect on if I had just taken a little bit more time, spoken to more people, asked more questions, I potentially would have done things differently. And who knows, gone in a different path. On the other hand, I'm really pleased with where I am right now. So I'm like, maybe it's best I didn't ask any questions and I did rush. But it kind of goes back to that. It's just being thoughtful, asking questions, and being patient.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So Titan by churnow, churn out, right? It's about John D. Rockefeller. And it's long. I love biographies. It's actually behind me. It's behind me because it's one of my favorite books. I love biographies. I love long biographies. I think those are the books where it's certainly fun to go to the beach or go on vacation and read something, a burner that's like”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ask questions. I think that's a part of my job now, more so than ever. And I think I've gotten better at it. But I think when you're young, whether you're in high school or college or even in your 20s, you don't ask questions. I didn't. But I wish I had asked more questions, almost annoyingly asked questions because that's the best way to learn and to help define yourself and who the person you're going to be is in the future.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Patience. My dad and my mom for sure they were very patient people, and I think the way I conduct myself, whether in work or in life, you might not always get what you want out the gate, but I think just understanding that good things will happen to good people. You take your time, you let things happen in their natural course, and things will take care of them themselves. And I think that's something I try to even teach my kids right now from a very early age.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Take things for their face because you have to look about who wrote it, why they wrote it, and what's driving it. And I think if we did that a little bit more as a country, we could understand each other better. And I think it would lead to better outcomes.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pet peeve. So, a simple one or a fun one. I've been doing a lot of grocery shopping during the pandemic, and we all want to be efficient, keep our distance from each other. And when you get into a grocery line and I see folks ahead of me not packing bags and just letting the cash attendant pack bags, that drives me nuts because I think we could just be a lot quicker and just move things along. That's my basic pet peeve. But something that I think about these days a lot, the internet and technology has democratized our ability to write and share our views, which I think is a great thing. And the privileges that we have under the First Amendment. But in these very divisive times where we have a lot of different points of view, I get articles sent to me or notes sent to me from friends or family. And I read an article and I'm like, did you not unpack this a few layers? I wish people would just unpack things a little bit more and not just.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“My most important daily habit is waking up in the morning, making breakfast for my girls, and just putting music on really loud, quite frankly. They like it, they like to dance, and it just kind of gets me into a nice mood for the day.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“I have a four year old, a two year old, and my wife and I are expecting a third baby soon, so I don't have hobbies. I don't have time. So what I do do for my mental health is I run a lot and I've always run a lot. So I don't know if that constitutes a hobby, but it is something that I am passionate about. And it's the 90 minutes of my day that I'm allowed to just unwind, think to myself, I don't listen to music. I just run and reflect.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“For me, why we do it, I mean, I go by Commissioner Benham. It feels odd to me. It certainly felt odd to me at the outset because I go by Russ. I've been, that's my name, my friends, my family. So it's a little weird. And a lot of people ask me, it's like, what do you want me to call you? But I feel like there's an institutional demand to call individuals who have been appointed by the president of the United States and confirmed by the Senate that this is their title. And it's no different than calling a judge by a judge, you know, it's judge whatever, right? It's that formality. And in many respects, it's what makes our country great. We have these structures in place that demand a level, I think, of respect in many senses, but also of authority that I think gives us the clear lens that we need.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, my term ends in June of 2021, so we'll work through the year and see what happens, and I'll continue talking about climate risk and LiveOR certainly. But I love doing these events, listening to you. And I thought my number one objective since the report came out in September was to raise awareness to as many different groups as possible to draw those relationships between financial markets and climate change and to seize on the opportunities.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Government idea by the president elect will require rethinking about climate change and how it relates to financial markets, but also the opportunities. And this is my point, is the end of the report, the final chapter, is awesome because it really identifies the opportunities. And I think your investors see that, right? It's the growth of the ESG portfolio and asset class. And what I think we've seen so far is just the tip of the iceberg. I think it's going to just continue to grow. There's going to be retail demand, but there's going to be institutional demand. And I think there's a strong role for the government to play in sort of supporting that, developing and supporting a structure because we have all the right incentives together or the incentives are aligned. We want to take on climate change and we want to mitigate those risks and we want to solve the problem. And I think when those interests are aligned from an official public sector standpoint and a private sector standpoint, we can work together in a way that's really going to both benefit the client.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Groups for years, and they weren't bought into the climate change financial stability, financial resilience argument. And I think now it's becoming more real because of COVID. And I've said this a couple times. I'm like, I wonder if you asked folks in our world 10 or 15 years ago, what would the correlation or relationship be between a health crisis, a health pandemic, and financial market resiliency and stability? And I bet you a lot would not draw a connection, but we saw what happened in March and April. We saw what reaction and intervention we needed by central banks from a monetary policy standpoint. We see to this day what fiscal policy we need to sustain the economy. We saw some really, really unprecedented things at financial markets, dislocations and prices, just draining of liquidity. And it's worrisome. And it was because of a health crisis. And I think climate crisis, climate change poses those same risks. So I think this all of”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“They view climate as an all of government exercise. So regardless of what specific policy data points or talking points they've issued, that larger statement gives a lot of context to, I think, the way they're going to view climate change in the financial services space. And this document, the greatest thing about this document, it's 200 pages. The bulk of it is about risk. And we have to think about that. We have to think about what risk it poses to the economy, what risk it poses to financial markets, COVID, perfect example. When I first started this exercise, I talked to economists.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“More specific level, I haven't spoken to anyone in President Elect Biden's camp about the report, but from public documents, they've actually in their larger climate policy papers, the one thing in the sort of sustainable finance or climate risk space that they've called for is mandatory disclosures for public reporting companies. So my suspicion is whoever is nominated potentially in the queue for SEC chairmanship, this will be a priority for the administration. Everything else kind of falls in line, I think, to an extent we discussed how as much of all these sort of policy recommendations are unique in their own way. They're all sort of connected. You've seen a lot of work by the Federal Reserve just in the past couple weeks and advancements in their view on climate change, and they've been doing it for a number of years. So I think that will only continue to snowball. And then most importantly, and you've seen this from the Biden folks.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Aware of where many large institutions, academics and public interest groups are thinking and consistently sends a really strong message. And we have a lot of folks in elected office who care deeply about this issue. We have some who are on the fence and we have some who are just not there and that's fine. My goal was to get certainly at the starting point people on the fence and then just to educate to an extent that it's possible and inform and see what these constituents are doing because we talked about what I view my most important job is to listen and it's like I'm appointed. I get that. I know that more than anyone else, but I have a responsibility to listen to my stakeholders and I think when you see folks in your district or your constituency speaking to you in a uniform, strong voice, then I think it requires action. I'm hopeful that this document will result in action.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Advocated for a carbon price, but to get this group to agree to that, that was pretty remarkable and I think a strong statement. The other things, which my takeaway is you have this diverse group of economic stakeholders from academics to private companies. And in this day and age, I think where the conversation about climate change and ESG and sustainable finance is really evolving so much and so rapidly just to get I think the public”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Number one recommendation was carbon price, I think, for a group as diverse as the committee was for them all to agree that you need a price on carbon. And we talked about this a little bit earlier with Bob and the economic point of view is creating incentives, right? The incentives are not in the right place so that the capital is not flowing in the right area. And we can have this debate about how we're going to mitigate and tackle climate change. But for those who strongly believe in a carbon price, how are we going to really start to move the needle on this discussion? You have to put a price on carbon, right? It's an externality right now. It's free, essentially, right? If there's no cost to emitting, there's no incentive to stop or reduce emissions. So that was, especially with oil and gas companies, and you're seeing this across the board. Baker Schultz model has a number of oil and gas companies, a number of large corporations have committed to, or at least.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that we, although we have different particular metrics with which we stress test institutions for traditional financial stress in the US, those would be relevant, but the more important thing would be to make sure that we coordinate and do it on a consistent basis internationally. Ultimately, it's data points. It's being able to observe. And this is the opposing view is legitimate in the sense of how are you supposed to predict future scenarios. Climate change, like I said, is not linear. How are we supposed to understand and appreciate different scenarios of different potential climate events or temperature changes over the next few decades? But we just have to build into different methodologies, different data points, and come up with a standardized, reliable, consistent set of scenarios so that then each of the institutions can stress against that same thing so that something is uniform across the board.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's another huge challenge. All of this all goes back to data, and data is one of the hugest and biggest challenges for climate change, right, across the board. And I would say that the biggest takeaways from the exercise that the advisory committee with respect to stress testing, because you're right, it does make sense. Why wouldn't you evaluate the resiliency of these financial institutions as they face these climate events? But it has to be consistent. And not only does it have to be consistent domestically, it's got to be consistently internationally. So there's been a number of efforts overseas. One that some of your listeners may know is the Network for Greening the Financial System, and that's being housed out of the Barque de France, the French Central Bank. And many of the recommendations, and this was an interesting observation from my perspective, was that the committee was committed to making sure that whatever recommendations they had specifically in the stress testing space, that it was consistent with international conclusions.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Constitutes climate risk above and beyond that umbrella term material risk. So it would have taken a long time to do that. But I think the number one goal was to just sort of clarify where we would fall on that line in the committee clearly fell on the side of disclosing in a mandatory fashion climate risks.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the specifics, no, that's going to take a long time, not years, but what the recommendation was in the space and disclosures was that with some caveats, everyone agreed that need to rethink disclosures. And I think the consensus, unanimous decision was the current standard is like guidance around climate risk at the SEC. And the recommendation is that there needs to be mandatory disclosure of climate risk that is clear, reliable, and fair. And I'm paraphrasing, so I'm probably missing a few things. But essentially, the bottom line is that we need to up our ante and we need to either rewrite the rule or affirm the guidance and be more clear for the public and the investor community what constitutes climate risk. The work that will go into that, I think, will be the very difficult work in sort of potentially drafting a rule, engaging with the public, or clarifying what kind of”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Might not constitute climate risk to another. So you might have very different lenses and views of what constitutes climate risk. And then if you're a portfolio manager, you're looking at companies that are correlated in the same industries and you don't have the same risk metrics. And then you're like, okay, where did this come from? So I think that's the issue. That's kind of the camp I fall in. But certainly we have to be careful about how we do it. And this is this unique intersection of environmental science and financial markets so that we can have the right outcomes, that we can see what potential patterns we have in the future and measure them accordingly so that compliance councils can evaluate and be transparent in what constitutes risk so that, again, investors can make these decisions in the most informed way possible.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is an umbrella term. If you're the compliance officer, if you're in house counsel, if you're out house counsel, whoever's putting those documents together, the Q's and the K's, it says material risk, we will evaluate what constitutes material risk. If it's climate or otherwise, we will put it in the report. On the other hand, material risk is very generic. It's a very principles-based. Climate risk is very unique as compared to traditional financial market risk. It's not linear in the sense that it's predictable and that you rely on past quarters or past performance to predict future outcomes. It is a lot of unknowns, and we need to be a little bit more prescriptive in what constitutes material climate risk so that that in-house counselor or that compliance officer has a clear understanding of what needs to be disclosed. And you can see the difficulty there because what constitutes climate risk to one compliance officer.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you're right. I said this recently, I say it often, but disclosures, I think if you asked sample set of people, what do they think about when they think about climate change and financial markets, disclosures would probably be the first thing. And in my view, it's information. It's the research analyst. It's the portfolio manager being able to make the most informed decision. But on the other hand, and I think this is where you're going, it's like, what's the context of that disclosure? What's the metrics that we're measuring different issues by and how are we supposed to really trust this information to be accurate and comparable and reliable? And interestingly, that discussion was probably the hardest, but I think the most rewarding at the advisory committee level because it is one of the most difficult ones from a policy perspective. There's a very clear standard right now for public reporting companies that you have to disclose material risk. And you could see on one side of the debate how someone might argue, look, material risk.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Property of infrastructure, of any hard asset that has financing behind it, and what does that mean for regional institutions, national institutions, and how can that ripple across the economy? And I think looking at all of these issues and the potential outcomes, the report does a really good job of trying to solve to the extent possible all the challenges that we might face and what policies could help to mitigate those issues.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“That can be affected by climate change. And in the end, the report talks about any number of things from disclosures, which is very common in the public reporting space regulated by the SEC, stress testing financial institutions, which would be more for prudential and supervisory out of the central banks or the bank regulators, data and taxonomy, how do we work together both domestically and internationally. And this goes to the ESG question and conundrum. What are we reading? What does this mean? And what am I comparing it to? And what information do I have to digest so that I can make the most informed decision as either an investor or a portfolio manager or a CIO? So these risks sort of flow across the economy. You're seeing these events happening, like I said, across the country, across the globe. How is it going to affect asset prices? How is it going to affect valuations of commercial?”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Credentials and his education as an economist, both as a risk manager, as an investor, as an economist, and then most recently in the past 10 or so years, as someone who's just been dedicated to climate change. And Bob's number one priority is carbon pricing and the allocation of capital based on incentives, having him at the helm to lead the committee was really fantastic. So we got the group together. I mapped out a very broad remit for the committee. So certainly, like I've said, CFTC, derivatives, regulator, but no one's been doing this in the US. Some work has been done at the Fed, especially at the regional level to talk about climate risk, but I thought since this sort of road is wide open, let's do a broad, comprehensive review. We have the right people together, we have the right institutional knowledge. Let's do a comprehensive look at both every element of risk.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you work through roadblocks? How do you work through friction and barriers? It's just to build the most diverse coalition possible. How do we get as many people from different perspectives agreeing on something and saying this is important, this is a challenge, government and policy needs to step in and be a part of this conversation testament to the members and their willingness to participate. But that was a huge, huge victory to be able to get this coalition together and agree ultimately to a report that's both long and comprehensive but unanimously 34 to 0 which is it's just awesome. The other thing was the chairman. Bob Litterman, you've observed this with these advisory. I mean, this is no different than running large Fortune 100 corporation. You need great leadership. And Bob, I think has been on your show is just he was the perfect mixture of leadership because of his experience at Goldman, because of his”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so there were a few things that I thought about very carefully in mapping out the plan and the vision for the report. The first thing and the most important thing was getting the right people. In the end, out of those ninety or so applicants that we got signed up 34. And 34 we had large both domestic and international banks. We have institutional and some smaller investors representing, I think, over six or seven trillion dollars of AUM. We have exchanges. We have intermediaries, data providers, we have agricultural end users, agricultural companies, energy companies, large oil and gas companies, academics, public interest. We have environmental groups. So broad spectrum of the economy, certainly a broad spectrum of financial markets and the sort of financial market ecosystem. And in my view, policymaking 101, right, how do you get something done?”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just going to observe climate events and make a correlation and a connection between those climate events, the economy, and then ultimately.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Regions, and communities, and what the outcomes are. And there's this term in the report subsystemic, and I love it because it's kind of a coined phrase that, yeah, you know, is it fair to say that climate change currently is going to cause financial stability or a financial crisis? No, not at the time. But if we have to think about climate change going forward for decades. And when you have these micro shocks across the country, which I think you could credibly say with what happened in the West Coast and what happens in the Gulf Coast, just as a matter of timing and compounding events happening across the country with these weather events that you can see larger risks happening at the regional level and then raising up to the national level. So I definitely reframed it. I'm not a scientist. I'm not going to talk about why the climate is changing and what patterns we're seeing from a scientist's perspective. I'm the first to admit that.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“such that it really is not hard to connect the dots about what future climate events caused by climate change will result in for both our economy and financial markets. And we don't have to get into a discussion of why this climate is changing. Let's just look at what's going on. And for the past several years, you've had record flooding in the Midwest. You have hurricane seasons in the Gulf Coast, and then obviously to speak about the forest fires in the West Coast. And there are so many different reasons why these are happening from a biodiversity standpoint, from a population standpoint. But the bottom line is that climate events and climate patterns are changing, and we can have this discussion as a civilian why I think it because of carbon emissions and greenhouse gases. But the bottom line is we're seeing these events on TV, in social media. We're seeing how it's affecting micro.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, 100%. And it's one of the key strategies I had because something I say pretty often is that I've been asked, why are you doing this? Like, why do you think this is your job? And I have a very clear answer why I think this. I mean, I'm a market regulator. I have to, I do my job on a day-to-day basis, but I'm also having to constantly think about future risk to financial markets. Like my job is not to just reflect on past risk and think how another housing crisis might cause a meltdown or how sovereign wealth fund might go down and cause ripples across the globe. My job is to think about future risks and what we have to anticipate from a policy perspective and how we can build a more resilient system. So the easiest way for me to do this was just to use examples of climate events and the unfortunate reality, and this is what I say all the time, is that these climate events keep happening in a more extreme or frequent manner.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Financial system, what they've been doing and how they can contribute to the conversation. So that in of itself was just a validation of my effort and a validation that this was an important issue that we needed to discuss at a federal level. So at that point I started to select a number of the committee members over the next, I think, month or so before we kicked it off officially.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Would anyone participate? I had to make a lot of phone calls to get people sort of a clear vision of what I wanted to do and intended to do. And in the end, after those 60 days, which brought us to September of 19, we had 90 applicants, what I can tell you from personal experience for an advisory committee that's like a ton of applicants. You may get a couple dozen or three dozen at most. Many are located in Washington, and they're great, but they're typically the reps of the companies who are in DC and want to message the sort of issues from the headquarters. But in this case, we got chief risk officers, we got the commercials, we got folks from across the world, and we got a lot of them, and they wanted to be a part of this effort. And I think they were excited about it. They saw the value in it, and they had done so much work themselves that they wanted to share that work and really demonstrate to a larger audience what they view as major risks for the U.S.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Laying the groundwork for what would come down the road. And we had a very thoughtful conversation for a couple hours in the private market basically tell us the regulator that this is a real risk. We've been thinking about this risk very carefully. And we think that there's a collaborative outcome where we need to come up with policies to help mitigate the risk and help transition to a net zero economy. So after that meeting, I then put out a public notice and asked folks to volunteer their time to be a part of a subcommittee of my larger advisory committee to examine climate-related financial market risk. And I think I had a 60-day comment period where folks could submit invitations or names to be a part of the committee. And I was certainly a little worried and also anxious and like uncertain of who would participate given again the political environment, the topic.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I would say back in 18, I started putting ideas together, understanding the risks themselves of doing this, right? You know, it's not necessarily a friendly environment currently to have a discussion about climate change working in the administration trying to do my job, but also trying to raise awareness about risks that I see. So I had to be very strategic and thoughtful about how I would conduct this and how I would execute it, knowing that my ultimate goal was to get a report out and some sort of policy document that would help inform policymakers in their decisions. So as time went by in June of nineteen, I had a public meeting, which again is not unusual for an advisory committee, so I basically convene a bunch of stakeholders and we had some great representatives from academia and investors and exchanges and some public interest. And we just had a discussion. And this effort was just an exercise in”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Can adapt and adjust as the markets themselves evolve. I oversee one of the five advisory communities, the market risk advisory committee. And as much as we are siloed and sort of run our own shop, which I pointed to earlier, the chair, the chairman or chairwoman runs the agency agenda. So the advisory committees give the commissioners really a great tool to elevate issues that they care about individually and really carve out their own path and niche as a commissioner. As time went by, I started talking about LIBOR transition, which I'm sure many of your listeners are aware of and working towards clearinghouse risk is a huge issue in our space given the clearing mandate after Dodd-Frank. So still sort of doing what I believe is baseline work that needs to get done.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“What the relationship is and what we needed to do, I think, as a group, both from the regulatory public sector standpoint and the private sector standpoint, to address the risk. We have advisory committees at the CFTC, and each of the commissioners oversees an advisory committee. Advisory committees are not unique to the CFTC. Many agencies have them. They are great tools. They are authorized by Congress and law. And what they really are is an opportunity for the policymaker or the individuals who oversee the agency to convene groups of private stakeholders and really just have a discussion and let the advisory committee advise the agency on what the agency is doing right or wrong or how it can think about different issues from a regulatory standpoint really gives us an opportunity to see what's going on in the marketplace today so that we can”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“This and what can it do for resolving and mitigating climate change? And I started reading and just getting to know what potentially the relationships were. The CFTC is like a great landing spot, right? Historically, we are a market that helps mitigate, in many respects, climate risk. It's certainly commercial risk for a farmer or rancher to be able to know that someone's going to be able to buy their harvest at the end of the season. But ultimately, if you're going to start planting seed in March or April, you're laying off price risk because you don't know what your grounding season is going to be like. So we've historically kind of done this in this respect of climate change. It's now just on a different scope and scale. So I think the CFTC is actually a nice place to have this exercise. But I was really kind of mixing a lot of my different expertise and then seeing what other folks were doing overseas. And a lot of central banks and different organizations had been thinking about climate financial risk.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of it has to do with what I did in my previous time in the Senate for sure. And then before that, as a trader and as an attorney, when I was at the commission in September of 17, you kind of get in your feet wet, you're figuring out what you want to do. You have to develop relationships with your colleagues, get to know the agency and the one that you're going to be part of this sort of executive team. And then as time goes by, you want to start to think about what your priorities are going to be to an extent this is kind of corny about like what your legacy is going to be what you want to leave the agency being known for and climate change has been an issue that's been growing in this country for a number of years i think it's fair to say that even in the past couple years the interest i think from a large portion of the country and the populace has grown and spiked in the financial circles sustainability esg has grown exponentially both from a retail perspective but i think just from a what is”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“World, which is why we have the deepest and the best capital markets, and also the best derivatives markets in the world, because we have fair, transparent rules and laws that oversee these markets.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“And be away from a regulatory regime or a centralized financial institution, I just don't think that functions in the US. It's just not going to. That's not the way we function historically, and that's not, I guess, the way we're going to function in the future. So you can probably take that business offshore. But I do think there's a way to balance the benefits of digital currencies and what the blockchain technology really speaks to. And that can be many, many positive things, including banking, the sort of underbanked and creating easier venues for people to have access to capital. And just, again, supporting innovation and technology in this potential new wave of financial services in the future. But we just have to figure out how to mesh the two together so that there's a fair balance between what we have as an existing market and regulatory structure that has served us well by and large, very, very well. It is why we are the strongest economy in the world.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have and really send a message to folks that look there are a number of different laws, whether it's the Commodity Exchange Act, whether it's the Bank Secrecy Act, whether it's any number of rules and laws that affect consumers, counterparties. There's a lot of reasons why crypto assets can be used for not such savory reasons. There's a lot of reasons why cash can be used for not such savory reasons. But I think if you're going to do business in the US, you have to understand that we are going to have a regulatory regime that functions and that applies to anything that constitutes or acts like a currency or a store of value. And I think there's a way, I know there's a way to combine these two very opposite forces and lead to a positive outcome, but there's going to have to be flexibility. I mean, if folks want to completely live in the dark.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Another good question and something that we're dealing with now because it's decentralized finance, right? We're taking the centralized institution, whether it's a bank or a regulator in that sense out of the equation. And I'm sure a lot of the stakeholders would say we've been hitting roadblocks since day one, but I think as the market evolves, and this is an interesting time, and we'll just use Bitcoin as the reference price, but I think you can see correlations across the asset class with the different coins that they've had quite a positive run up. It's a store value, low interest rate environment. People are looking for safe harbor, and Bitcoin and the other coins have become something of a safe harbor. I'm sure there's a bunch of speculation going on as well that's driving the price up, but we have to be very cognizant of the role that these crypto assets, these digital coins are going to play, and we have to work within the sort of confine of what we.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you think about this juxtaposition of decentralization, right, the blockchain in theory perfectly transparent to everyone and then a regulatory body, which to some extent in Satoshi's white paper is the antithesis of decentralization?”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's natural. That's going to happen, especially in a new market. But certainly our objective is to eliminate that to the maximum extent possible by a strong message from the enforcement division, but also working closely.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Prices in different respects, but what was the source for the Bitcoin price? What was driving the future's price? And what was the relationship between the exchange and those reference prices? And I think those were all things we had to examine carefully. We're still examining them carefully and we're still learning. But it's one of those very difficult situations where I think we want to support innovation. We want to support entrepreneurship. We want to support technology. And we just have to walk, but walk slowly, carefully, and understand by working with the sort of ecosystem of constituents that we're going to do this, we're going to do this together. Don't rush us or push us because that, I think, could be counterproductive, but understand that as a group, we're going to have to work through this slowly so that we get it right. And in the end, if you look at the enforcement cases since then, there's been a number of enforcement cases, fraud and market abuse for sure.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are hard, but we also have to be flexible and understand that there's going to be new technology emerging constantly, and we have to live within the bounds of the law because Congress does not frequently change the law. It happens periodically if we have to do something urgently. I think Congress does react. But from a large policy perspective, these things evolve over time. So we looked very carefully at it. For me personally, the most important things were pre-trade price transparency, post-trade transparency and reporting. And then what would constitute the sort of, and I use this word lightly, but trail, right? And from a reporting standpoint, the trail becomes very important of how are we going to act identify counterparties? How are we going to identify price in a future's market? The price of the futures contract is being driven by an underlying market, right? So there is many sources for these futures.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source
“But if it's not a security, and if you look up the definition of commodity in the Connecting Exchange Act, that's pretty much everything. Like if it's not a security, it's a commodity. So it naturally sort of fell to us because it wasn't clearly defined as a security. And there was a futures product. Two of them actually listed in December of 17. So in the build up to that, which had taken months, we were engaged pretty heavily with the exchanges and the clearinghouses and the stakeholders in figuring out what are the traditional sort of rigors of our marketplace. How are they going to apply, if at all, to digital assets? And what are the potential outcomes intended or not? We have to live and breathe by the law, the commodity exchange act. We are not authorized to act outside the scope of the law. We have to interpret it many times, and sometimes those interpretations are right or wrong, easy.”
2021-02-22 · Capital Allocators · Acting Chairman Rostin Behnam – CFTC Regulatory Perspectives on Crypto and Climate (Capital Allocators, EP.178) · IDENTIFIED FROM THE TRANSCRIPT · source