The House Financial Services Committee convened a hearing today with Treasury Secretary Geithner ostensibly to discuss the Eurozone crisis, but the discussion quickly devolved into partisan questioning on a wide range of political issues, including the Volcker Rule (see FSM Report PROPTRADE10), sanctions against Iran (see Reports in the SANCTIONS series), the Federal Insurance Office (see FSM Report INSURANCE23), and international harmonization of financial reform. On the latter issue, Mr. Geithner for the first time strongly refuted the need in the U.S. for express barriers between retail and investment banking along the lines now adopted in the U.K. Going a bit farther than before, Mr. Geithner said that he did not think the current approach to sovereign debt in the Volcker Rule would undermine market liquidity, although he deferred on this to the banking agencies.

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