The following is an op-ed written by Tom Quaadman, vice president of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce.
This week, five federal regulators met Treasury Secretary Jacob Lew’s directive to finish the Volcker Rule (named after former Federal Reserve Chairman Paul Volcker) by the end of the year. Lew set the arbitrary deadline in July and continued to push the five agencies charged with crafting the Volcker Rule to reach the finish line – no matter what the cost.
The Volcker Rule is the most complex piece of the vast 400-rule Dodd Frank financial regulatory reform bill that added three new federal financial regulators to the alphabet soup of nearly two dozen existing regulators. The goal of this particular rule was to limit the ability of banks to make profits by investing their own money – so called “proprietary trading.” The theory was that by limiting these investments, banks would be safer and have less risk. The trick was to find a simple way to distinguish between the investments Congress sought to ban and the much needed investments banks must make every day to help fuel the Main Street economy.
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