Subcommittees to Examine Volcker Rule Impact on Economy, Jobs

Washington, Jan 11. A joint hearing in January held by two Financial Services subcommittees will evaluate the proposed Volcker Rule and its impact on the economy, jobs, businesses and investors.  Members of the subcommittees will also ask federal regulators about the costs of complying with the regulations as well as perceived benefits that will result from the regulations.

The Volcker Rule, a controversial part of the massive Dodd-Frank Act, directs regulators to write and issue rules prohibiting bank holding companies and their affiliates from engaging in proprietary trading and sponsoring and investing in hedge funds and private equity funds.  

Regulators have released a draft proposal of the Volcker Rule for public comment. In a sign of its complexity, the draft spans 298 pages and asks respondents to answer more than 1,300 questions. 

“From the beginning there have been serious concerns that this complex regulation will hinder American markets, competitiveness and job creation,” said Financial Services Committee Chairman Spencer Bachus.  “Despite claims from Dodd-Frank supporters that our foreign competitors would implement the same restrictions on proprietary trading, no other country has any plans to do so.  Therefore, we run the grave risk of creating an unlevel playing field that disadvantages the U.S. economy at a time when unemployment remains stubbornly high.  We must ensure that regulators take into consideration the Volcker Rule’s costs versus benefits as well as its impact on jobs, pensions, retirement savings and investment.”

The joint hearing to be held on January 18 continues the Financial Services Committee’s efforts to identify and correct job-destroying provisions in the 2,300-page Dodd-Frank Act.

Financial Institutions and Consumer Credit Subcommittee Chairman Shelley Moore Capito said, “This hearing will provide Members the opportunity to ask questions to clarify confusion surrounding the implementation of the proposed Volcker rules.  The proposed rules are extensive and the interplay between agencies fuels uncertainty about the end result.    Given the complexity and the broad impact of the proposed rules, it is imperative that Members of the Financial Institutions and Capital Markets Subcommittees have a better understanding of the potential consequences of implementing these rules.”

Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett said, “Like much of Dodd-Frank, the Volcker Rule is a solution in search of a problem and raises more questions than it answers.  Job-killing government overreach is not what the doctor ordered for our struggling economy.  We need smart, sensible rules that foster economic growth and robust job creation, not unnecessary ones that hamstring our economy and send American jobs overseas.”

Time of hearing:  Wednesday, January 18 at 9:30 a.m.

Location:  2128 Rayburn House Office Building

Witnesses scheduled to testify:

Panel I:

Martin J. Gruenberg, Acting Chairman, Federal Deposit Insurance Corporation

Gary Gensler, Chairman, Commodity Futures Trading Commission

Mary Schapiro, Chairman, Securities and Exchange Commission

Daniel K. Tarullo, Governor, Board of Governors of the Federal Reserve System

John Walsh, Acting Comptroller of the Currency, Office of the Comptroller of the Currency

Panel II:

Douglas Elliott, Fellow, Economic Studies, Initiative on Business and Public Policy, Brookings Institution

Scott Evans, Executive Vice President, President of Asset Management, TIAA-CREF

Alexander Marx, Head of Global Bond Trading, Fidelity Investments

Douglas J. Peebles, Chief Investment Office and Head of Fixed Income, Alliance Bernstein

Mark Standish, President & Co-CEO, RBC Capital Markets

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