Top Regulators Punt Volcker Problems to Interagency Group
On Wednesday, the House FinServ Committee held the second hearing on the newly-finalized Volcker rule (see Client Report PROPTRADE18), building on last month’s hearing (see Client Report PROPTRADE19) and further assessing the rules potential impact. Chairman Hensarling (R-TX) and Rep. Garrett (R-NJ) once again led the charge to allege a lack of adequate economic and cost-benefit analysis by the regulators. Significant time was spent on the treatment of CLOs and TruPS (where Democrats and Republicans joined to chide the agencies), competitive disadvantages due to the ban on proprietary trading, and coordination of enforcement by the agencies. The panel, which included the top officials from the five US regulatory agencies overseeing the implementation of the Volcker rule, answered many questions by stating that they are priorities of the newly-established interagency group, which will coordinate implementation and interpretation efforts. Democrats were somewhat assuaged, but they joined Republicans in demanding more details and accountability from this new group. This report analyzes today’s hearing.

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