NEWS RELEASE
WASHINGTON, June 17, 2009 – The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today applauded the Obama administration white paper, “Financial Regulatory Reform: A New Foundation,” for its proposed treatment of contracts currently traded on unregulated over-the-counter markets, which artificially drives the price of oil and needless volatility, taking a toll on consumers.
“The paper does an excellent job of analyzing one of the biggest problems again facing our nation – price swings that cannot be explained by the physical market for oil,” said ATA President and CEO James C. May. “The white paper notes that a major source of America’s financial meltdown was unmonitored, over-the-counter (OTC) derivatives transactions. ATA supports the administration’s recommendation to require the regulated clearing of all standard OTC transactions.”
May continued, “Adding transparency to this type of trading will prevent another meltdown by plugging a major loophole that currently allows billions of dollars of unmonitored oil transactions that have driven jet fuel, diesel, heating oil and gasoline prices through the roof.”
Separately, May struck a note of caution stating that the white paper does not go far enough in at least one respect. “We are convinced that the public’s ability to see how much oil or natural gas has been bought or sold is essential, so that the public is not blindsided.”
ATA supports imposing aggregate speculative position limits across trading venues, which will level the playing field and treat all speculation equally whether on a regulated exchange or over the counter. ATA has consistently stated that all of the loopholes created in 2000 commodities law should be eliminated.
“These loopholes enable speculators to exercise undue influence on the price paid by consumers for essential commodities,” said May.
ATA airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. For additional industry information, visit www.airlines.org.
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Note: This press release was recast to reflect the name of the white paper.