Commissioner Christy Goldsmith Romero: Opening Statement at CFTC Meeting

I’m thrilled to welcome back the Market Risk Advisory Committee (MRAC) and our esteemed speakers today! It’s wonderful to have Commissioner Johnson leading our meeting and I appreciate her support of MRAC.

We’re lucky to have Treasury Assistant Secretary Josh Frost here today to update us on the work being done to strengthen U.S. Treasury markets. These markets are crucial to the U.S. financial system and the CFTC plays a key role in regulating them. Treasury markets are known for being deep and highly liquid. The U.S. Treasury futures markets, under the CFTC’s regulation, see an average daily trading volume of $750 billion. Central clearing in these markets has helped reduce systemic risk and improve transparency, making them resilient even in times of stress.

On another note, as the sponsor of the CFTC Technology Advisory Committee (TAC), I wanted to touch on two important areas on today’s agenda: cybersecurity and AI.

I firmly believe that ongoing dialogue with registered entities and stakeholders is key to understanding their challenges, including cybersecurity. I’ve had many discussions with various players in the industry to grasp their perspectives on cybersecurity. This engagement, along with recent cyber attacks like the ION Markets incident, has led the Commission to propose regulations around operational resilience for swap dealers and brokers to address cyber risks from third-party service providers.

Today, we have speakers, including Treasury Deputy Assistant Secretary of Cyber and Chief AI Officer Todd Conklin, sharing their insights on cyber resilience. DAS Conklin has been actively involved in TAC’s work on cybersecurity and AI and contributed to a report on “Responsible AI in Financial Markets.”

Speaking of AI, DAS Conklin will update us on Treasury’s efforts in this area. The TAC report on AI in financial markets, compiled with inputs from experts like DAS Conklin, highlights the opportunities and risks associated with AI. It’s exciting to explore how AI can address complex problems while ensuring proper risk management to avoid issues like market manipulation and cyber attacks.

The world of finance is evolving rapidly, and it’s evident that AI will play a significant role in shaping the future. I’m looking forward to learning more about Treasury’s AI initiatives and how they align with the TAC report recommendations. Exciting times ahead as we navigate the ever-changing landscape of finance and technology!