House Republicans Mount Another Attack on Volcker

The House FinServ Committee held a hearing today to assess the contentious, and still unfinished, implementation of Section 619 of Dodd-Frank, the so-called Volcker Rule (see FSM Report PROPTRADE5). The hearing featured many of the same comments directed at regulators earlier this year (see Client Report PROPTRADE12), as Members on both sides of the aisle continued to express concerns about the impact of the regulation on U.S. competitiveness and the ability of regulators to effectively identify proprietary trading. Industry representatives on the panel demanded additional clarity and argued that higher capital requirements would be more effective than an outright ban on proprietary trading. Chairman Bachus (R-AL), along with incoming Chairman Hensarling (R-TX), led the charge against the proposed rule, building on a letter they recently sent calling for a two-year implementation delay. Nevertheless, despite this legislative pressure and Chairman Shapiro’s departure from the SEC this week, it appears the ruling-making process continues to advance, with FRB Chairman Bernanke yesterday indicating the rule will be finalized by early next year. This report analyzes today’s session.

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