Agency Presses Ahead With Derivatives Probe, Defying Fed

WASHINGTON —  The head of the federal agency that regulates futures trading vowed Thursday to press ahead with a probe of the multitrillion-dollar over-the-counter derivatives market, defying the wishes of powerful financial regulators.

Brooksley Born, chairwoman of the Commodity Futures Trading Commission, said it would be “irresponsible” to bow to Federal Reserve Board Chairman Alan Greenspan, Treasury Secretary Robert Rubin and members of Congress who want to curb her agency’s oversight of the market.

Born has angered them by launching a review of whether derivatives transactions outside regulated exchanges need tighter supervision.

“It’s of nobody’s interest not to study this market,” Born told reporters at a briefing. Her tiny agency for years has been forced to defend its turf as the financial markets have grown and changed dramatically.

But Born has now placed her agency in the middle of a huge turf battle in Washington.

The agency’s over-the-counter derivatives review, launched in May, has angered the Federal Reserve, the Treasury Department and the Securities and Exchange Commission, which have urged the regulator not to meddle in this sophisticated market.