President Barack Obama named Timothy Massad, a lawyer who earned his spurs watching over the country's bank bailout program, as the next head of the U.S. derivatives regulator – the Commodity Futures Trading Commission.
If the Senate confirms Massad, he would head an agency that was given vast new regulatory powers after the 2008 financial crisis to rein in the uncontrolled trading of complex derivatives on Wall Street – a $630 trillion market that many accused of playing a major role in destabilizing the economy.
The nomination is a last-minute solution to avoid a leadership vacuum at the powerful regulator, since current CFTC Chairman Gary Gensler's term expires on Jan. 3, 2014. Other leaders have announced their departure from the agency in the past few weeks as well.
"Tim's a guy who doesn’t seek the spotlight, but he consistently delivers," Obama said on Tuesday. "I have every confidence that he's the right man to lead an agency designed to prevent future crises."
Massad may have a hard time getting through the nomination process, as Republicans have been blocking many of Obama’s appointees. But most criticism of Obama’s decision to nominate Massad came from financial industry critics who say he may not be as tough on Wall Street as his predecessor.
The CFTC, an agency that has long been overseeing agriculture futures, has only recently been put in charge of the derivatives market and has yet to write some of its planned rules.
But Gensler has used his tenure at the agency to fiercely criticize the big banks, extract big settlements from them and push through thousands of pages of new regulations.
Gensler seemed to have no problem publicly critiquing Obama’s stances on regulatory issues. Massad, by contrast, has mainly towed the Obama administration line.
That has left some liberals concerned.
"Gary Gensler set a very high standard," said Sen. Elizabeth Warren, D-Mass., who has been highly critical of Wall Street. "I look forward to hearing more from Tim Massad about what steps he thinks the CFTC can take to further reduce the risk of future crises."
The White House praised Massad on Tuesday for overseeing the Troubled Asset Relief Program, the taxpayer-funded rescue mission for banks and other troubled companies.
Massad joined the Treasury in May 2009 after a brief spell at the Congressional Oversight Panel, the political body that oversaw TARP. He was closely involved with the program, heading it from June 2011, when the Senate confirmed him as Assistant Secretary for Financial Stability.
But little is known about Massad’s regulatory experience when it comes to derivatives.
“He hasn’t said anything about derivatives on the record, which is cause for concern,” said Alexis Goldstein, the media director for The Other 98%, a nonprofit organization that advocates for progressive economic policies. “It doesn’t really make me that confident that he’s going to be a Gensler-type (regulator).”
Beyond overcoming critics, Massad’s biggest challenge may be running an agency with too little money to carry out its job.
The CFTC currently has a $195 million budget. Gensler recently said that employees would be furloughed for two weeks, and that some cases would have to be dropped from the agency’s agenda because of the budget shortfall.
In his speech Tuesday, Obama pleaded for more money for the agency.
“Ever since we passed Wall Street reform, its opponents have tried to starve funding for the agencies responsible for carrying it out,” he said. The CFTC, “makes us safer. It makes our financial system work better, and it’s foolish for us not to adequately resource it."
Al Jazeera and wire services. Peter Moskowitz contributed to this report.