Responding to recent industry lobbying, Better Markets has urged federal regulators to reject a Wall Street campaign that seeks to delay and derail implementation of the Volcker Rule, which is a key element of financial reform designed to protect taxpayers and the U.S. Treasury from another crisis.
In letters to four agencies, Better Markets has called for no extension to the public comment period on their Volcker Rule proposal. It is scheduled to close on Jan. 13.
“Industry amnesia must be rejected: for example, it must be remembered that, but for the extraordinary actions of the U.S. government in the fall of 2008, the banks now lobbying to delay and defeat the Volcker Rule and financial reform more broadly would have ended up in bankruptcy, as their unrestrained conduct pushed the financial system and the economy to the brink of collapse,” said Dennis Kelleher, president and CEO of the non-partisan group that promotes the public interest in financial markets.
“The Volcker Rule, combined with other regulations, is an essential measure to stop large, too-big-to-fail banks from making huge, highly leveraged, swing-for-the-fences bets to juice their bonuses, while shifting the risk of catastrophic loss to the public. The industry’s relentless effort to derail or delay this rule must be rejected,” Mr. Kelleher wrote.
Drawing attention to a recent study, Better Markets noted the industry already has had three years of input and lobbying on the issue, including working to insert changes and exceptions during legislative process, which made the rule more complex. And separate rulemaking by the Commodities Futures Trading Commission will give the industry yet another opportunity to voice its concerns, which it will likely use to its advantage.
“It is the height of hypocrisy for banks, their allies, and their lobbyists to insist – over the past three years — on innumerable provisions in the law and the rule, which add to their length and complexity, and then turn around and attack those very same provisions as too long and complex. They shouldn’t be allowed to have it both ways,” Mr. Kelleher wrote.
The letter stated that financial reform was designed to protect the public, not bank profits, and that it benefits everyone including those on Wall Street.