Banks, their allies and hired guns are engaged in a spare-no-expense campaign to get regulators to back off of the proposed Volcker Rule, which is designed to end to some of the banks’ riskiest trading.  The proposed Volcker Rule is far from ideal, but it is nonetheless a step forward in the overall Dodd Frank process to get bank conduct under control and reduce the likelihood of failures and taxpayer bailouts.   

The pressure on regulators is nonstop:  The latest  examples include four House Republican Chairman sent a letter to the FDIC, OCC, Fed and SEC last week all but ordering them to extend the comment deadline for the proposed rule.  This followed a pre-Thanksgiving letter from the Chamber of Commerce to the very same regulators saying that the entire rule should be scrapped and started all over.  Then, SIFMA, ABA and other bank trade associations sent a letter to the same regulators asking for extensive delays in the comment period. 

We sent a letter to those same regulators on Friday urging them to proceed with the comment period as proposed and, indeed, with all the Dodd Frank rulemaking expeditiously.  

What the industry wants everyone to forget is the crisis, their role in it and the damage it has done and continues to do.  Such revisionist history has to be confronted and rejected, as we did in the letter:

             “Industry’s claims that the Volcker Rule will ‘reduce market liquidity, capital formation and credit availability, and thereby hamper economic growth and job creation’ disregard the fact that the financial crisis did more damage to those concerns than any rule or reform possibly could.  In September 2008, there was no ‘market liquidity, capital formation [or] credit availability’ and, since then, there has been little ‘economic growth’ and even less ‘job creation.’  Industry amnesia more broadly must be also be rejected:  for example, it must be remembered that, but for the extraordinary actions of the U.S. government in the Fall of 2008, every single bank 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.”

That is also why we track the costs of the crisis on this website.