Only one day after Federal Reserve Board Chairman Ben Bernanke announced that regulators are close to finalizing the Volcker Rule, House Republicans continue their attack.
"The Volcker rule is designed to prevent proprietary trading by banks. But no one, not even Paul Volcker himself, argues that proprietary trading was a cause of the financial crisis," Financial Services Committee Chairman Spencer Bachus said at a hearing devoted to the issue. "The Volcker rule sticks out as an oddly considered afterthought - a solution in search of a problem."
The Volcker rule, named for former Fed Chairman Paul Volcker, is one of the most conflict-ridden elements of the 2010 Dodd-Frank reform law. The rule would ban proprietary trading and limit bank investments in private equity.
"Even Volcker has signaled he has concerns about the approach taken by the five agencies that must jointly write the rule," writes American Banker's Victoria Finkle.
"I think we have all taken note of Chairman Volcker's statements that, number one, proprietary trading at the commercial banks was not central to the crisis, and that he has expressed concern with the rule bearing his name," said Rep. Jeb Hensarling, the Texas Republican that will become chairman of the panel next year. "I don't think he's giving his offspring up for adoption, but he doesn't seem to be well-pleased with it."
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