Some of the biggest champions of the Volcker Rule have complained that the 300-page proposal implementing it is simply too long and complicated. That includes former Fed Chairman Paul Volcker himself, who first suggested the idea of a ban on banks' proprietary trading.
It also includes Jon Stewart, who made the point to Nancy Pelosi, the House Democratic leader, during an episode of last week's, "The Daily Show."
"Paul Volcker writes a three-page memo to the president that says, 'We should stop' " proprietary trading, Stewart said. "That three-page memo turns into a 300-page … [rule], the summary of which is 41 pages, to the point where Paul Volcker says, 'I don't like this anymore.' Is that why people don't like Congress? What happened is a simple clear rule that would have been easily regulated is attacked by lobbyists, bankers and special interests and turned into oatmeal."
It was unclear if Pelosi, who was the House speaker when Dodd-Frank passed last year, agreed or not. "The fact is the Volcker Rule is a very good idea as originally proposed and how that translates into legislative language … is the responsibility that we have," she said. "But you know what: that is so insider."
She said regulators cannot ignore concerns about the rule raised by stakeholders.
"Even Paul Volcker says in terms of how you write the rule" there "has to be a period of public comment, and people have made suggestions to say there may be some unintended consequences," she said.
But Stewart said incorporating exceptions to the rule could go too far.
"By adding these exemptions, by all accounts, it has muddled the purpose of the Volcker Rule, to the point where [Volcker] thinks it's no longer quite effective, and by muddling it makes it harder to regulate, makes it harder to enforce," he said.
