CFTC Chairman Massad Addressing International Problems In Wake of FXCM

CFTC Chairman testifies in Congress as protecting markets and investors appears the top priority

In the wake of significant losses at currency brokerage firm FXCM, the U.S. Commodity Futures Trading Commission (CFTC) is looking to implement additional safeguards. But is the real risk management issue – a flash crash – the one issue most difficult to address?

FXCM is a retail-focused derivatives brokerage firm that imploded when Swiss central bankers announced a surprise decision to remove their currency peg from the euro currency. As reported in ValueWalk, certain quantitative investment managers had pegged the true market value of the Swiss currency 40 percent higher than the euro. When the announcement...