In this report, we analyze today’s FinServ Capital Markets, Securities, and Investment Subcommittee hearing on the potential repeal of or changes to the Volcker rule (see Client Report PROPTRADE18).  At which Republicans and Democrats took up their longstanding partisan positions on the issue.  Led by Chair Huizenga (R-MI), Republicans reiterated their longstanding calls for repealing the law attacking the rule on grounds that it is overly complex and undermines market liquidity.  They further blamed the rule for contributing to lackluster economic growth, suggested it was incompatible with the president’s executive order and may also contribute to systemic risk.  Democrats, including Ranking Member Maloney (D-NY), defended the rule by arguing that it prevents banks from gambling with Americans’ deposits as well as contending that bond market liquidity has not been materially affected since Volcker was implemented.  Rep. Sherman (D-CA) also defended the rule from attacks that it undermines American firms’ competitiveness.

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