House Financial Services Committee Chairman Jeb Hensarling (R-Texas) criticized the approval of the final Volcker Rule on Tuesday by federal regulators.
“The Volcker Rule is just the latest example of Washington’s regulatory overkill that ends up hurting more than it helps. My constituents in East Texas didn’t cause the financial crisis, yet the Public Utility Commission of Texas warned that the Volcker Rule will result in higher electricity prices. Teachers didn’t cause the financial crisis, yet TIAA-CREF warned that the Volcker Rule will hurt their pension funds,” Hensarling said in a statement on Tuesday.
“In fact, not even proprietary trading – which the Volcker Rule seeks to ban – caused the financial crisis, as Paul Volcker himself has acknowledged. We know Washington regulations, not the lack of them, helped lead us into the crisis,” Hensarling said.
“So three years and 18,000 comment letters after the original Volcker Rule proposal, we are left with one more incomprehensible Washington regulation — this one weighing in at nearly 1,000 pages — that will do nothing to help our nation overcome the slowest, weakest, non-recovery recovery since the Great Depression,” the Texas Republican said.
The rule would prohibit banks from using their own funds to trade for profit. It also places limits on financial institutions’ ability to own or invest in private equity and hedge funds.
“Hearings in our committee also demonstrated that the Volcker Rule will make it harder for businesses and consumers everywhere to get the credit they need. And because no other country in the world has imposed a similar burden, the Volcker Rule puts our capital markets at a competitive disadvantage in today’s global economy,” Hensarling also said.
The federal regulators finalizing the rule include the SEC, the Fed, the Commodities Futures Trading Commission, the FDIC and the Office of the Comptroller of the Currency.