SIFMA Comment Letter Suggesting a Do-over on the Volcker Rule

SIFMA has released a comment letter addressed to Spencer Bachus, Chairman of the House Financial Services Committee, expressing support for the Chairman's initiative to explore a "less burdensome legislative alternative" to the Volcker Rule. SIFMA cautions that the Volcker Rule could have substantial adverse effects on the U.S. and global economies, and that it targets activities which did not contribute meaningfully to the 2008 financial crisis. The letter makes three main arguments: (i) Congress should reevaluate the statutory text of Volcker, as the legislative process surrounding it was rushed and hampered by an absence of considered-fact-finding; (ii) Congress should rely on already proposed capital regulations (such as Basel III), instead of the Volcker Rule's activities restrictions. to address perceived trading and conflict risks; and (iii) if Congress decides to keep the Volcker Rule framework, it should make "major modifications," including reversing the presumption that all short-term principal trading is impermissible.

Lofchie Comment: A few other provisions in Dodd-Frank were arguably also adopted in haste.

View letter here(links externally to SIFMA website).