On what grounds, if any, can the CFTC be criticized for aiding and abetting the MGRM disaster?
What will be an ideal response?
MGRM's problems were mainly related to liquidity. The CFTC enabled MGRM to incur its massive positions by waiving normal rules and regulations. By imposing super margin requirements after the company began to incur huge cash outflows, the CFTC compounded these liquidity problems. The CFTC's actions also alerted the market to MGRM's situation and made it more difficult for MGAG to negotiate and/or roll over needed credit lines.
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